Money: Master the Game – A Book Review

In Book Reviews, Management by James4 Comments

Are you familiar with the terms: index funds, mutual funds, annuities, portfolio allocation, fiduciary, and living trust? I wasn’t, until I read Money: Master The Game -7 Simple Steps to Financial Freedom, the first book Tony Robbins has written in nearly two decades – and the first Tony Robbins book I’ve ever read. I’ve always known Tony as the giant  infomercial guy but never gave his work any of my time. I, like a lot of people, wrote him off as a motivational smoke blower with more fluff than substance. I definitely underestimated him. There certainly were times in the book when I felt he could have shaved off half or more of his presentation and get to the point, but that’s his style, and his style has obviously worked for him – the world-class resort that he owns in Fiji is enough proof that Tony probably knows what he’s doing – not to mention all the CEOs and other high-profile professionals that come to him for private life coaching. The reason I chose this book was because I am or was painfully aware of my lack of knowledge in the world of finances. I didn’t really know what to expect going into the book – I decided to read it after Tim Ferriss posted about it on his blog. I’m happy to say it lived up to the hype Ferriss gave it.  I was pleased to discover the book was written for the average person with little to no experience, yet offered information and tips that even financial literate individuals could benefit from. I was also pleased to see that the book’s primary aim was getting the most back with the littlest risk with a focus on long-term commitment. In other words, it’s not a book about trying to beat the market – it’s a book for the 99.9% of us who are not high frequency traders.

What’s in the Book?

This book is a large book. It’s nearly 700 pages and broken into 7 main sections.

Section 1 – Welcome to the Jungle: The Journey Begins With the First Step
Chapter 1.1: It’s Your Money! It’s Your Life! Take Control
Chapter 1.2: The 7 Simple Steps to Financial Freedom: Create and Income for Life
Chapter 1.3: Tap the Power: Make the Most Important Financial Decision of You Life
Chapter 1.4: Money Mastery: It’s Time to Break Through

Section 2 – Become the Insider: Know the Rules Before You Get in the Game
Chapter 2.0: Break Free: Shattering the 9 Financial Myths
Chapter 2.1: Myth 1: The $13T Lie: “Invest with Us. We’ll Beat the Market!”
Chapter 2.2: Myth 2.: “Our Fees? They’re a Small Price to Pay!”
Chapter 2.3: Myth 3: “Our Returns? What You See Is What You Get”
Chapter 2.4: Myth 4: “I’m Your Broker, and I’m Here to Help”
Chapter 2.5: Myth 5: “Your Retirement Is Just a 401(k) Away”
Chapter 2.6: Myth 6: Target-Date Funds: “Just Set It and Forget It”
Chapter 2.7: Myth 7: “I Hate Annuities, and you Should Too”
Chapter 2.8: Myth 8: “You Gotta Take Huge Risks to Get Big Rewards!”
Chapter 2.9: Myth 9: “The Lies We Tell Ourselves”

Section 3 – What’s The Price of Your Dreams? Make The Game Winnable
Chapter 3.1: What’s the Price of Your Dream?: Make the Game Winnable
Chapter 3.2: What’s Your Plan?
Chapter 3.3: Speed it Up: 1. Save More and Invest the Difference
Chapter 3.4: Speed it Up: 2. Earn More and Invest the Difference
Chapter 3.5: Speed it Up: 3. Reduce Fees and Taxes (and Invest the Difference)
Chapter 3.6: Speed it Up: 4. Get Better Returns and Speed Your Way to Victory
Chapter 3.7: Speed it Up: 5. Change Your Life – and Lifestyle – for the Better

Section 4 – Make The Most Important Investment Decision of Your Life
Chapter 4.1: The Ultimate Bucket List: Asset Allocation
Chapter 4.2: Playing to Win: The Risk/Growth Bucket
Chapter 4.3: The Dream Bucket
Chapter 4.4: Timing Is Everything?

Section 5 – Upside Without the Downside: Create a Lifetime Income Plan
Chapter 5.1: Invincible, Unsinkable, Unconquerable: The All Seasons Strategy
Chapter 5.2: It’s Time to Thrive: Storm-Proof Returns and Unrivaled Results
Chapter 5.3: Freedom: Creating Your Lifetime Income Plan
Chapter 5.4: Time to Win: Your Income Is the Outcome
Chapter 5.5: Secrets of the Ultrawealthy(That You can Use Too!)

Section 6 – Invest Like the .001%: The Billionaire’s Playbook
Chapter 6.0: Meet the Masters
Chapter 6.1: Carl Icahn: Master of the Universe
Chapter 6.2: David Swensen: A $23.9 Billion Labor of Love
Chapter 6.3: John C. Bogle: The Vanguard of Investing
Chapter 6.4: Warren Buffett: The Oracle of Omaha
Chapter 6.5: Paul Tudor Jones: A Modern-Day Robin Hood
Chapter 6.6: Ray Dalio: A Man for All Seasons
Chapter 6.7: Mary Callahan Erdoes: The Trillion-Dollar Woman
Chapter 6.8: T. Boone Pickens: Made to Be Rich, Made to Give
Chapter 6.9: Kyle Bass: The Master of Risk
Chapter 6.10: Marc Faber: The Billionaire They Call Dr. Doom
Chapter 6.11: Charles Schwab: Talking to Chuck, the People’s Broker
Chapter 6.12: Sir John Templeton: The Greatest Investor of the 20th Century?

Section 7 – Just Do it, Enjoy it, and Share it!
Chapter 7.1: The Future is Brighter Than You Think
Chapter 7.2: The Wealth of Passion
Chapter 7.3: The Final Secret

Highlights

As you can see by the table of contents this book packs a lot. I’ll mention some of the highlights that stood out for me. The first one is the power of compound interest. Robbins goes in depth breaking down how compound interest works and how to maximize it. Everything that follows after chapter one is built upon the foundation of compound interest. An ideal return on your investments would be around 10%. Getting as close to this number and navigating all the possible routes and obstacles (fees, taxes, etc.) is what most of the book is about.

Index funds verses mutual funds

I’ll sum up this comparison with one statistic that should be all you need to know when comparing the two. 96% of actively managed mutual funds fail to beat the market (index funds) over any sustained period of time. If your’e not familiar with these terms a mutual fund is a series of stocks that are selected by stock brokers that you pay to select and manage your investment. Choosing an Index fund is an investment in an entire index – such as the S&P 500 (a combination of the 500 top performing stocks). It’s not a bet on only select, individual stocks. Basically it’s a bet on capitalism and the returns have been around 10 % over the past 50 years. This means even with the booms and busts the overall average is an increase. There was the 2000s which is called the lost decade when returns were completely flat, but long-term investing is – long-term, it’s an investment for your retirement. The only people who make money on individual stocks are high frequency traders who spend millions of dollars on infrastructure technology to give them hundredths of a second advantages on trades – and they rarely lose. It’s impossible for the average Joe to compete. There are also a few rare Unicorns like Warren Buffet, Ray Dalio, and Carl Icahn who have played the market like a broker would and have made billions doing it, but there’s a reason there’s only 10 or 12 of these people on earth. The odds are probably statistically better you’ll beat the high frequency traders with a dial-up internet connection than become the next Carl Icahn.

The all season portfolio

Unicorn investor Ray Dalio who manages the world’s largest hedge fund created the all season portfolio which is designed to do well in any kind of market scenario. The portfolio Ray shares with Tony has returned 10% annually for the last 40 years (1974-2013). During that stretch you would have made money 85% of the time. There were only 6 losses during those 40 years and the average loss was 1.47%. Two of the loses were 0.03%. So basically you would have lost money four times in 40 years. Not bad. The volatility of the portfolio is extremely low – the worst loss in 40 years was -3.93%. Guys like Ray usually don’t give interviews, much less share their strategies, but Tony has a way of getting this stuff from these guys. I guess that’s what makes Tony Robbins a legend in his own right.

Final Thoughts of a Wannabe Farmer 

This book is probably a must read for nearly everyone. People who don’t have any retirement plan this is the book for you. People who currently have a retirement plan – this is the book for you because chances are you’re paying too much in fees and taxes and literally losing thousands. I shared a tip a learned in the book about home mortgages with my sister and her husband.  By simply prepaying the next month’s principle on your mortgage you can pay your 30 year loan off in 15 years. You’re going to pay that money anyway, and it’s only the principal, it amounts to a few extra hundred per month depending on your loan. My sister and her husband did not know this, so it was nice to share that gift of knowledge. The book is loaded with little gifts like this. Aside from all of the financial tips it wouldn’t be a Tony Robbins book if there wasn’t a lot of self-esteem building. This is Tony’s specialty and to his credit he does a pretty good job, and most of it is not fluff – although there are a few cotton balls in there. There were a few gems that stood out for me. Learn to work harder on yourself than you do on your job. This is the key to becoming more valuable. If you want to make twice as much money then become twice as valuable. This of course does not mean neglect your job, but rather put in the extra time to make yourself better at what you do, or want to do.  People are paid by the value they create. This is why people who work the register at McDonalds make minimum wage and the CEO of McDonalds makes millions. What makes most people just dreamers versus those who live the dream is that dreamers have never figured out the price of their dreams. Here Tony is pointing out that most people imagine the number to be so high that they never begin the journey. They defeat themselves from the start. The reality is most people’s numbers for financial freedom or starting a business are extremely inflated. Just knowing the real cost and looking at the actual numbers instead of the imaginary numbers you’ve guessed at can be a enough to motivate you into taking the first action. In fact, that is the first action. When you go shopping you never settle for a guess at how much something costs before you buy it, surely your dreams should at least get the same respect as a roll of paper towels. There are thousands, if not millions of people living your dream because they would not accept self sabotage, and they took themselves seriously. Somebody is doing it. Why not you? What story are you telling yourself? I can and I will, or I can’t and I won’t? This is all about thinking positive and self-esteem, and when you combine that with the anchor of review to keep you grounded in reality, and make sure you’re actually doing what you think you’re doing the sky is the limit. First you have to believe it, then you have to do it, and then you have to be consistently checking yourself and making adjustments when needed, and if you’re lucky you’ll have good people in your life to help you with those checks along the way too. This is the combination for success that I hope to fine tune and achieve in my life going forward. If you want to do great things, then find people who are doing great things and do what they’re doing. There is no mystery to achieving success and happiness. But nobody is going to hand it to you. Are you brave enough to take it?

Buy the book via Amazon by clicking HERE (It’s an affiliate link so I get a little kickback if you buy. Thanks!)

Introduction to the Book

Comments

  1. Ryan

    This was the best finance book I’ve read in a while, and I have been reading them since high school. The annuities part was really fascinating, as most annuities are scams but this book made me rethink that. Anyway, a “freedom fund” is a must! Great job keeping an open mind and sharing tips and bettering yourself! –Your old neighbor

  2. Author
    James

    Hey (old) neighbor! I didn’t know what an annuity was before reading the book, but it was nice to learn what they are, why they have a bad reputation, and learn that not all annuities are bad. The way the system is set up, and considering that math doesn’t fail, a freedom fund is an absolute must. Wish they would have taught us this stuff in high school – but there’s a laundry list of survival information like this nearly everyone has to teach themselves. Nice thing is, we’re living in the information age and it’s all a few clicks away. Thanks for reading and commenting. 🙂

  3. Pingback: The Law of Success in 16 Lessons – A Book Review | I Wanna Farm

  4. Pingback: The Miracle Morning – A Book Review | I Wanna Farm

Leave a Reply