Introduction
Is absolute financial freedom your ultimate goal? Do you turn to self-help books to achieve it or attend financial seminars to enhance financial literacy? The book Money: Master the Game can greatly help you.
About the Author
Maybe you wonder why the book Money: Master the Game? It’s because the author is none other than Tonny Robbins.
Tony Robbins is an American motivational speaker, life coach, and bestselling author. He has helped millions of people worldwide overcome challenges and achieve their goals. He was born on February 29, 1960, in Glendale, California.
Robbins is also an entrepreneur and investor who has founded several companies, including Robbins Research International (RRI), which he founded in 1987. RRI designs educational courses and products that help people improve their lives through personal growth.
From a young age, he has worked with people to help them achieve their potential. He’s been featured in the New York Times and other media outlets and nominated for two Emmy and a Golden Globe award. He’s also made appearances on Oprah Winfrey’s show, which has allowed him to reach millions of people worldwide with his message about achieving success through self-development.
Some of Robbins’ best-known quotes include: “The secret to wealth is simple: Find a way to do more for others than anyone else. Become more valuable. Do more. Give more. Be more. Serve more.” and “We can use the power of our imagination to create the life we want.”
The 7-Step to Financial Freedom
“Information without execution is poverty.
Remember, we’re drowning in information but starving for wisdom.”
If you want to be successful, you have to take action. You need to do something with your information. You can’t keep collecting facts, data, and figures. You need to take them and use them.
In this article, I will share one of the great takeaways from the best-selling book, especially the 7-step plan thousands of people have put into practice. Learn and follow these simple steps to understand your financial needs and journey and build a secure financial future.
As you learn the steps for financial independence, I encourage you to execute the key insights you’ve gained and apply them in the real world. Don’t let them sit idly by while other people are getting ahead of you.
Step 1: Welcome to the Jungle: The Journey Begins with the First Step
So, what is the first step to making your financial journey successful?
The answer is simple: saving.
You should set at least 10% of your earnings aside.
“But here’s the key to success: you must make your savings automatic.”
It’s the first step to mastering the game and getting ahead of the curve. The more money you can set aside, the better off you’ll be, and the more options you’ll have for investing in yourself or starting a business.
So why do so many people fail to set aside savings? Well, for one thing, they’re afraid. They think saving means missing out on something else. But in reality, saving does not equal deprivation. It’s about learning to prioritize your money and make choices to help you achieve your financial goals.
If there’s one thing we’ve learned from our years in finance, it’ll be harder in the long run if you don’t save money now. And while it can be tough at first, once you get used to it—and see how much better off you are, it will become easier.
“What we’re after are the feelings, the emotions, we think money can create.”
Money is an emotional game. We aren’t just playing with numbers on a screen. We’re playing with our emotions and our beliefs about what money means to us. If you can master this emotional game, you can make enough money and even more.
The feeling of security is one of those things that money can’t buy. However, you can achieve comfort and security by making smart decisions with your money so that you never have to worry about whether or not you’ll have enough for monthly expenses and basic needs.
The feeling of love is something money can’t buy, but investing in yourself and others is essential for creating meaningful relationships with people who care about you. And when it comes down to it, if your relationships are significant enough, they’ll give you all kinds of other benefits, including more value.
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And finally, the feeling of happiness itself. The feeling comes from being content with where you are, who you are as a person, and knowing that no matter what happens next, you’re ready for it because you’ve got everything and done what you need to do for yourself and others.
Step 2: Know the Rules Before You Get in the Game
If you’re playing the money game, it’s important to know the rules before you get in. Too many people have been playing by their own rules, and they’ve been losing, especially if they are guided by several myths in the world of finance.
“To have unconventional success, you can’t be guided by conventional wisdom.”
Myth 1: You can beat the market.
Your odds of beating the market’s returns are slim. Only a few can successfully do it. Most actively managed mutual funds do not outperform the market. Therefore, buying a passively managed index fund that matches the overall market is a better investment.
Myth 2: People are generally honest about fees
The average mutual fund costs 3.17% a year. Over time, these high fees will eat into the money you earn.
Myth 3: People are always telling the truth about returns
Mutual fund advertisements that promise returns of 6% are promising closer to 3%.
Myth 4: Your broker is always working in your best interest.
Your broker’s primary responsibility is to increase the value of your portfolio. However, this interest conflicts with his broker’s desire to sell you a certain mutual fund, a commission-based product that will boost his earnings. A better decision is to hire financial experts or a registered investment advisor (RIA), who charges an annual fee for his services.
Myth 5: Your 401(k) plan is the best way to establish a secure financial future.
Although 401K plans benefit from tax deferral, most come with various fees and costs. This can severely reduce your take-home pay and hurt your chances of having a comfortable retirement.
Myth 6: Target date funds are a good way to diversify your investments.
Target-date funds can make sense for an average investor who wants to diversify but doesn’t know how to do so. Target-date funds get higher and better returns in your younger years and preserve capital as you age, moving away from stocks and towards bonds.
Many people have the wrong idea about bonds and stocks. They assume that bonds are safer than stocks; for them, bonds and stocks move in opposite directions.
Myth 7: Annuities Should Be Avoided
Generally speaking, they will tell you that annuities are a bad investment. But are they? It might not be the right choice for you because not all annuities are created equal.
Myth 8: It is necessary to take risks to experience a large return on investment.
Wise and successful investors don’t speculate with their hard-earned savings. They focus on the potential to make much money while risking a little.
Myth 9: Success is determined by factors out of our control.
According to Robbins, anyone can control and improve their financial situation, though it takes a shift in mindset. Successful people achieve different goals because they are persistent and laser-focused on growing their own money.
Step 3: Make the Game Winnable
“You can’t reach your financial dreams unless you know precisely how much it will take to get there.”
Dreamers who can’t measure their finances are doomed to manage them poorly.
Understanding what you truly need is the first step in turning your dreams into reality. Once you’ve clarified your goals, ensure they’re realistic and attainable. If they’re not, reevaluate them until they are.
Related: Smart Financial Goals: Here’s a List of Great Examples
Step 4: Make the Most Important Investment in Your Life
“Asset allocation is more than diversification. It means dividing up your money among different classes, or types, of investments (such as stock market, commodities, or real estate) and in specific proportions that you decide in advance, according to your goals or needs, risk tolerance, and stage of life.”
Remember these four important things:
1. Diversifying between your Security Bucket and Growth Bucket can help you achieve your financial goals. You should diversify across asset classes, markets, and time frames.
2. Dollar-cost averaging can be a great way to invest. Volatility can be your friend because you can buy investments for less when the market goes down. That way, when the market returns, you’ll have made money without risking too much of your cash.
3. Follow a Dream Bucket Strategy to maximize the emotional and big rewards of investing, so you can enjoy the benefits of your abilities in the present instead of waiting until sometime in the distant future.
4. Rebalancing and tax harvesting can help maximize your average returns while minimizing potential losses.
Asset allocation is the most important decision of your lifetime. It is an important thing to consider for your economic growth.
Step 5: Create a Lifetime Income Plan
Tony Robbins offers a look into the portfolio of Ray Dalio, who may be the greatest investor in history.
Ray Dalio, one of the most successful hedge fund managers, suggests a diversified portfolio that includes 30% in stocks, 7.5% in gold, 7.5% in commodities, and 15% in intermediate US bonds. He further recommends 40% in long-term US bonds.
Ray suggests that dividing your money equally among investments is not enough. Each investment’s risk must be considered for financial success.
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Step 6: Invest Like the 0.001%
To be successful in your financial journey, you need to learn from the playbook of the best billionaire investors:
1. Don’t lose money. Billionaires take every precaution to avoid losing their fortunes.
2. Risk a little to earn a lot. Risk one dollar to earn five. Billionaires don’t just invest in making a little money—they invest for the long-term.
3. Anticipate and Diversify. Billionaires diversify their investments to protect against failure by spreading out their risks.
4. You’re never done. Keep learning and saving. The 0.001% are persistent in their pursuit of excellence, representing a higher goal to which we all should aspire.
One of the secrets of the ultrawealthy is to establish a recoverable trust. This will allow you to avoid probate when you pass, and it can also protect your assets when you are incapacitated.
Related: The Millionaire Next Door: Here are 7 Remarkable Lessons Learned
Step 7: Just do it, Enjoy it, and Share it
“So what’s the final secret, the key to a rich life? Enjoy it and share it! But first, you must take action. As the saying goes, if what you learn leads to knowledge, you become a fool; but if what you learn leads to action, you can become wealthy.”
Tony suggests that merely growing your investments is not a sufficient strategy for attaining a certain lifestyle. You’ll need to know what to do when you’ve grown your assets sufficiently and then preserve and enjoy the fruits of your labor for your entire life.
Remember, spending on physical materials is not the only thing to make yourself happy. It’s about
1. Investing in experiences
Studies show that people who invest in experiences are happier than those who invest in material things. It is because experiences are more memorable and can make you feel more connected to others. They also help develop your character, which can make you more successful in life.
It’s practical advice to invest in experiences by taking a trip with friends, learning a new skill or instrument, or even attending a seminar on investing.
2. Buying time for yourself
If you’re looking to master the game, you must make sure your time is spent wisely. If you’re spending all your time working, you’re not giving yourself any time, and that’s not good for your health or happiness. So if you want to master the game, start by mastering your time. Invest your money for your time freedom. Then pursue what makes you happy by doing your passion, the things that excite you, and the activities you love to do.
Related: Time vs. Money: Which is More Important in Life?
3. Giving to others
Giving is a great way to become a master of money.
Giving to others is an act that allows you to be generous and helps you connect with other people in powerful ways. You can give money directly to people who need it, or you can give money indirectly by helping others find jobs or by donating to worthy causes. Either way, the experience is powerful and meaningful.
Recommended Video: Serving God and People: Becoming Wealthy by Giving Back
Related: The Go-Giver Book Summary: Unravel the Powerful Secrets to Succeed
Conclusion
The final step is to put the knowledge you’ve gained from this book into practice. You can make all the plans in the world, but you’ll see results only by doing something with them.
The Money: Master the Game: 7 Steps to Financial Freedom may seem like a lot to digest. But it’s not nearly as complicated as it sounds. All you have to do is keep these seven necessary steps in mind, and you’ll earn more money than ever before and achieve financial freedom.
If you want to know more about wealth-building strategies and success stories of successful investors, follow our podcast, The Path to Wellth, and subscribe to our youtube channel.
The Path to Wellth by Hannes Hennche is a weekly podcast by Wellthy Capital. Each week we discuss how investors can build wealth and achieve financial success. We also feature interviews with investors who have been successful in their investing careers.
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