Money: Master the Game by Tony Robbins
Tony Robbins is not known as a financial master and he shouldn't be. He is a motivator and a self-help guru. That is his thing. With that in mind, I decided to read Money: Master the Game. Essentially, this book aggregates Tony's interviews with the world's smartest investors such as Dalio, Schwab, Bogle, and Buffet and then puts the information together to form a basic investment strategy for the mass population and provide a high level overview of investing. Tony touches on pretty much everything you really need to know about investing.
- Low fees are critical to accumulate wealth
- Time is a necessity
- Balance and diversify to reduce risk. There is a lot more than that, but those 3 things kind of frame the book in my opinion.
Tony writes in a way that motivates the reader. Very simple and easy to read, but at the same time he does teach the reader quite a bit. He explains the difference between and low and high-cap stocks, municipal and treasurary bonds etc. , the history of social security, the rise and fall of pension plans, the birth of the 401k, and a lot about his humble upbringing. He does a pretty good job of hitting the basics of economics and investing. If you look up reviews of this book, you will see that most negative reviews mention the 'All Weather Portfolio'. This is essentially a dumbed-down portfolio strategy created by Ray Dalio which is the key to building wealth according to Tony.
Ray Dalio's All Weather Portfolio:
- 30% in U.S. stocks
- 40% in Long-term U.S. Treasury Bonds
- 15% in Intermediate-Term U.S. Treasury Bonds
- 7.50% in Gold
- 7.50% in broad Commodity basket
A lot of 'experts' claim that this portfolio isn't as good as the book makes it sound and that is really won't help the investor in all economic conditions. Another very important thing to know is that this book tells you avoid mutual funds and brokers at all costs. He mentions the enormous fees and how 97% or something under-perform index funds. Sure some brokers beat the market, but the average investor can't afford to buy into those funds. Tony mentions Warren Buffet's famous quote about monkey's flipping coins. "You send 100 monkeys into a gym flipping coins, and they keep flipping and flipping, and finally I think it’s one out of 1,200 flips heads every time, and they say he’s a genius. He’s not a genius. There’s always going to be one that flips heads any time period.". This is basically saying luck is the factor leading to beating the market and not skill. Tony is also a huge advocate for Fixed Index Annuities and Deferred Annuities. He explains that with these investments you are guaranteed the money you put in plus you have the chance of making money when the value of the stock market's index is rising. Sounds okay to me.
Overall, I recommend the book to someone who needs a bit more understanding on how to start investing. I learned a lot and did get more motivated to save more.