Unshakeable is another excellent book from Tony Robbins. In this book Robbins examines the current financial conditions and takes you through facts, figures and historical patterns to help you understand the market and it's fluctuations. Robbins has tips for anyone looking to invest money and invest in your own future. Common misconceptions and mistakes are discussed so you know what not to do. Using his hand-selected financial ‘masters' Robbins supplements the information with plenty of real-life examples. The last section of the book is perhaps the most important – it's about how money doesn't bring happiness and fulfilment. Robbins has tips on how to master your mind and find inner peace.
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Who is this book for?
Unshakeable is an excellent book from Tony Robbins. He examines the current financial conditions through facts, figures and historical patterns to help you understand the market and its fluctuations. Robbins has tips for anyone looking to invest money and build a fulfilling future.
About the author
Tony Robbins is considered to be the number one life and business strategist. He is an entrepreneur, author, and philanthropist, and travels all over the world for motivational talks. Tony Robbins has helped more than 50 million people from more than 100 countries transform their lives and their businesses. He is the author of six internationally best-selling books.
In this summary
Robbins offers the reader specific steps they can implement to protect their investments while maximising their wealth. No matter your salary, your stage of life, or when you started, Tony Robbins provides the tools to help you achieve your financial goals more rapidly than you ever thought possible.
WEALTH: THE RULE BOOK
Being unshakeable is a state of mind. It involves tremendous inner peace, confidence, and the strength to get up after a failure, in a world of uncertainty. It’s not easy to be unshakeable. Most people feel stressed and confused with the current state of the global economy.
Yet, a few brilliant financial minds have figured out how to make money in good and bad times. These money masters know that you don’t have to predict the future to win this game. You can’t control where the economy or the stock market is going.
Instead, focus on what you can control. Learn the rules of the financial game, its players, their agendas, where you can get hurt, and how you can win. Unshakeable shows you how the masters of the financial world prepare themselves for profit, instead of just reacting to financial winters.
Who are these Money Masters?
- Ray Dalio, the most successful hedge fund manager in history;
- Jack Bogle, founder of Vanguard & revered pioneer of index funds;
- Mary Callahan Erdoes, who oversees $2.4 trillion in assets at JPMorgan Chase & Co.;
- T. Boone Pickens, billionaire oil tycoon;
- Carl Icahn, America’s most formidable “activist” investor;
- David Swensen, whose financial wizardry transformed Yale into one of the world’s wealthiest universities;
- John Paulson, a hedge fund manager who personally earned $4.9 billion in 2010; and
- Warren Buffett, the most celebrated investor ever to walk the Earth.
Let’s see what we can learn from them.
COMPOUND INTEREST & FINANCIAL WINTERS
Recognising patterns in the financial market is the number one skill towards prosperity. By adapting and utilising them, the money masters have consistently profited over the years – and so can you.
“My wealth has come from a combination of living in America, some lucky genes, and compound interest.” – Warren Buffett
The first pattern we need to recognise, then, is Warren Buffett’s secret towards amassing a fortune of $65 billion: compound interest. The power of compounding can turn a modest sum of money into a massive fortune over time.
Most people believe that becoming financially free comes through earning a big income. Still, we’ve all read stories about movie stars, musicians, and athletes who earned a fortune yet ended up broke.
In reality, the route to true financial freedom is to set aside a portion of your money and invest it, so that it compounds over many years. To get there, save and invest – become an owner, not just a consumer. The best place to compound money over time is in the stock market.
Another pattern to recognise: financial winter in the stock market comes, on average, every year.
Recognising the predictability of long-term patterns can help you prepare and profit, while the unprepared ones will crash.
7 Facts About The Stock Market
When a market falls by at least 10% from its peak, it’s called a correction. When a market falls by at least 20% from its peak, it’s called a bear market.
- On average, corrections have occurred about once a year since 1900. The average correction lasts only 54 days – less than two months!
- Less than 20% of all corrections turn into a bear market.
- Nobody can predict consistently whether the market will rise or fall.
- The stock market rises over time, despite many short-term setbacks. The US market had a positive return in 27 of the last 36 years.
- Bear markets occur every 3-5 years. On average, they last about a year.
- When the mood in the market is overwhelmingly bleak, superinvestors like Buffett tend to view it as a positive sign – eventually bear markets become bull markets.
- Stay in the market long enough for compounding to work its magic, and you will end up with a healthy return – even if your timing was hopelessly unlucky.
“The greatest danger is being OUT of the market.”
HOW TO ACCESS YOUR FINANCIAL FREEDOM FASTER
The answer is simple: you need to minimise fees – transaction costs, taxes and brokerage fees.
Transaction Costs & Taxes
When the stock goes up after you buy it, you win. But the margin needs to be big enough to cover the transaction costs. You’ll also have to pay taxes on your profits when you sell the stock. Transaction costs and taxes are quietly eating away your returns!
Specifically, the largest expense in your life, taxes, could slash your profits by 30% or more, unless you’re holding the fund inside a tax-deferred account such as an IRA (Individual Retirement Account) or a 401(k) plan.
Reduce your annual costs from 4.17% (taxed accounts) to 3.17% (tax-deferred ones), or you might lose almost two-thirds of your profits over time!
81% of people with more than $5 million have an advisor – it makes sense that you seek one, too. However, finding an advisor you can trust is difficult. 90% of ‘financial advisors’ are actually just brokers – they get paid a commission every time a customer buys a financial product they sell. In other words, they put their employer’s and their own interests before yours.
Ideally, work with an independent advisor who has a fiduciary duty to put your interests first, has experience working with people like you, and you can connect on a personal level.
A world-class advisor will help you from start to finish by defining your goals, keeping you on a steady path toward them weathering market volatility, and massively increasing the probability that you’ll actually achieve those goals through a well-designed investment strategy.
Key Questions For Your Advisor
- Are you a registered investment advisor? (If the answer is no, this advisor is a broker.)
- Are you (or your firm) affiliated with a broker-dealer? (If the answer is yes, then walk away.)
- Does your firm offer proprietary mutual funds or separately managed accounts? (Hopefully, the answer is no.)
- Do you or your firm receive any third-party compensation for recommending particular investments? (You need to know that your advisor has no monetary incentive to recommend products.)
- What's your philosophy when it comes to investing?
- What financial planning services do you offer beyond investment strategy and portfolio management?
- Where will my money be held? (A fiduciary advisor should always use a third-party custodian to hold your funds.)
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THE UNSHAKEABLE RULEBOOK
4 Principles For Your Investment Decisions
- Don't Lose - The more money you lose, the harder it is to get back to where you started.
- Asymmetric Risk/Reward – Instead of the ‘high-risk, high-return’ myth, hunt for opportunities whose rewards vastly outweigh the risks.
- Tax Efficiency – Taxes can wipe out 30% or more of your investment returns, so be careful of mutual funds touting their pre-tax returns.
- Diversification – Don’t put all your eggs in one basket!
How To Accelerate Your Financial Freedom
- Stop living in fear – It leads to inaction and playing safe.
- Prepare for the bear, but keep the prize in sight – The stock market always rebounds, regardless of the corrections and crashes we encounter.
- Diversify your portfolio – Combine asset classes with different risk characteristics and different rates of return, so you can balance the return you aim for with the risk you’re comfortable taking.
- Customise your assets – The type of assets you own should be matched to what you personally need to accomplish: stocks, bonds, or alternative investments (real estate, private equity funds, gold etc.)
- Asset allocation drives return – How to balance your stocks, bonds, and alternatives is the most important investment decision you’ll ever make.
- The rule of seven – Put aside seven years of income in income-producing investments, such as bonds and MLPs. If stocks crash, tap into these assets to meet your short-term needs.
- Bonus advice: use index funds for the core of your portfolio and always have a financial cushion.
The Psychology Of Wealth
Tony Robbins highlights that 80% of success is psychology and 20% is mechanics. Here’s how to build a robust system that enables you to stay on target.
6 Biggest Mistakes Investors Make (And How to Avoid Them)
Mistake 1 – Seeking Confirmation Of Your Beliefs
Often, if you love a particular stock or fund, you will seek out information that validates your ownership. Confirmation bias, however, is a dangerous predisposition.
The Solution: ask better questions & find qualified people who disagree with you. The best investors welcome opinions that contradict their own.
Mistake 2: Mistaking Recent Events For Ongoing Trends
Most investors buy the wrong thing at exactly the wrong moment, because of their belief that the current trend will continue.
The Solution: Don’t sell out. Instead, rebalance. What the best investors do is create a list of simple rules to guide them so that when things get emotional, they stay the course and remain on-target long term.
Mistake 3: Overestimating Your Abilities & Knowledge
We consistently overestimate our abilities, our knowledge, and our future prospects.
The Solution: When it comes to investing, self-deception may be the biggest expense of all! Get real, be honest.
Mistake 4: Greed, Gambling, & The Quest For Home Runs
The best strategy to win the game of investing is to achieve sustainable long-term returns. It’s tempting to swing for home runs, especially when you think other people are getting rich faster than you!
The Solution: It’s a marathon, not a sprint. Remember that.
Mistake 5: Staying Home
Humans have a natural tendency to stay within their comfort zone.
The Solution: Expand your horizons. Diversify internationally, so that not only you can reduce your overall risk, but also increase your returns.
Mistake 6: Negativity & Loss Aversion
Your brain wants you to be fearful & irrational in times of turmoil, so you can avoid pain at all costs – don’t listen to it!
The Solution: The single best way to handle market turmoil – and the fears it can trigger – is to be prepared for it.
To quickly summarise so far, the aforementioned rules and procedures will make it easier for you to:
- Invest for the long term,
- Trade less,
- Lower your investment fees and transaction costs,
- Be more open to views that differ from your own,
- Reduce risk by diversifying globally, and
- Control the fears that could otherwise derail you during bear markets.
THE ART OF FULFILMENT
Having financial wealth doesn’t guarantee that you’ll be wealthy as a human being. Money doesn’t change people. It just magnifies who they already are. Real wealth is emotional, psychological, and spiritual. To master the art of fulfillment, remember the following principles:
- You Must Keep Growing. Everything in life either grows or dies. That goes for relationships, businesses, or anything else.
- .You Have to Give If you don’t give, there’s only so much you can feel inside, and you’ll never feel fully alive.
THE UNSHAKEABLE MIND
The secret of living an extraordinary life is to take control of the mind. Our lives are shaped not by our conditions, but by our decisions. The biggest decision you have to make: how to approach life.
Unless you commit to enjoy life with its ups and downs, your survival mind will create suffering whenever your desires or expectations are not met.
Tony Robbins follows The 90-Second Rule: when he starts suffering, he gives himself 90 seconds to return to a beautiful state. He breathes gently and slows things down, he steps out of the situation and distances himself from the stressful thoughts ( “they’re just thoughts”), and he starts to focus on something he appreciates.
If you practice this consistently, this shift in focus will allow you to see the good in every situation. You will become unshakeable.
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- The route to true financial freedom: set aside a portion of your money and invest it, so that it compounds over many years.
- To access your financial freedom faster, minimise transaction costs, taxes, and brokerage fees.
- Principles for investment: 1. Don't lose, 2. Hunt for asymmetric risk/reward opportunities, 3. Seek tax efficiency, and 4. Diversify.
- 80% of success is psychology and 20% is mechanics.
- Invest for the long term, trade less, lower your investment fees and transaction costs, be open to views that differ from your own, diversify globally, and control your fears during bear markets.
- Money doesn’t change people. It just magnifies who they already are.
I Will Teach You To Be Rich by Ramit Sethi is a great read for anyone wanting to get a better handle on personal finances. It helps you save for the things that will bring you true happiness and a rich life.
You Are A Badass At Making Money by Jen Sincero focuses on your mindset, thoughts, and beliefs and it is an excellent read for anyone looking for financial advice with a decent sense of humour.
Rich Dad Poor Dad by Robert Kiyosaki is drawing lessons from the author’s own experiences and discusses how to create financial independence through investing, property ownership and building businesses.
Guidelines is my eBook that summarises the main lessons from 33 of the best-selling self-help books in one place. It is the ultimate book summary; Available as a 80-page ebook and 115-minute audio book. Guidelines lists 31 rules (or guidelines) that you should follow to improve your productivity, become a better leader, do better in business, improve your health, succeed in life and become a happier person.
- Start consistently putting aside a portion of your money.
- Create an investment portfolio and keep add money to it over the years.
- Rebalance your portfolio of investments and optimise it with the help of a financial advisor.
- Download the complete book on Amazon.
This summary is not intended as a replacement for the original book and all quotes are credited to the above mentioned author and publisher.