What's up internet? My name is TridentLion in this video we're going to be talking about Tony Robbins new book, "Unshakeable: your financial freedom playbook, creating a piece of mind in a world of volatility." With Peter Mallouk. Here on this channel it's entirely geared to helping you level up! Level up whether that be with relationships, with regards to finance, with regards to business, as well as so many other fun and exciting topics. So, if you're new to the channel consider subscribing. Tony Robbins breaks this book into three separate sections.The first section is the rule book, the second section is going to be the playbook, and the third section is the psychology of wealth. Now let's get into the first part of this book which is the rule book. You are an investor whether you recognize it or not. Whether you believe it or not at the very least most people are trading their time for money which is an investment by pretending like you're not an investor and sitting on the sidelines and not allocating your money properly or just leaving in the bank or cash or under your mattress.
You are making a very costly mistake by staying by the sidelines. Fortunately Tony Robbins has brought us this book to carefully and thoughtfully show us how you can become a master of your investment fate instead of just sitting on the sidelines full of fear and getting whipsawed by reacting to the markets volatility and panicking in damaging ways, by making emotional decisions based on fear. Let's talk about the name of the book, "Unshakeable," an unwavering and undisputed confidence a steadfast commitment to the truth, presence peace of mind and a calm amidst the storm. There you have the definition of Unshakable, now take that definition and apply it to yourself and your financial situation.
Imagine being unshakeable regarding your finance how great would you feel how certain would you feel? How confident, secure, and comfortable would you feel? Knowing that, you know what you're doing. This is your financial situation that we're trying to improve and level up with so really take this information seriously and try to apply it to your life. If you have to pause the video take notes as it goes along and I highly recommend anyone to pick up this book of the haven't already that's seeking to master money in their own life. You can find a link for the book in the description that way you can get a greater understanding and have the right mindset going forward into it not only because this mindstate better you but it can give you a competitive advantage amongst others in the marketplace.
When others are afraid you have the presence of mind to take advantage of the turmoil. Too many people obsess and focus on what they can't control, you need to become hyper focused on what you can control.If you're going to compete in the financial world you need to learn the rules of the financial game. You need to know who the players are in the game, and what their agendas are. You have to be aware of what can hurt you and also how you can win.
This financial knowledge can set you free. Your decisions will equal your destiny and I'm sure the last thing you want is a destiny filled with poverty and uncertainty. So make the conscious decision to master this area in your life and no longer step on the sidelines. Allowing other people to become rich and you to become stagnant or become poor.
Make the decision to not be stupid with money. Become smart, understand it Too many people out there just are not aware of what's going on in the financial world. When I read this book, I. Learned about what a bear market means.
I'm sure most of you probably don't even know what a bear market is. Well, what a bear market is is when a market falls by at least twenty percent from its peak. That's what a bear market is. A correction is when the market falls at least ten percent from its peak, both of these terms I had no idea what it meant and most people don't know that as well.
Some people out there that invest in stocks don't even know what that means, and that's why they're losing because when one of these two things occurs whether a correction or a bear market most people get terrified of losing their money so they pull out of the stock market, and resort to cash. By doing that, it's ignorance and fear helping you to just lose money. You have to recognize that in the market there are patterns that occur there are ups and down so why would you freak out in the wintertime when you know that spring is just around the corner. By being ignorant you're left in the dark, but by being aware of how these patterns work you can use it to your advantage.
By reading this book you can learn when to plant the seeds to get the greatest harvest. You're never gonna earn your way to financial freedom the real route to riches it's a set aside a portion of your money and invested so that you can utilize the power of compounding over many years. The single best place to compound money over many years is in the stock market but you really need to understand the market patterns. You need to understand the seasons that it goes through.
So now let's get into the next part of the rulebook that discusses... 27 Freedom facts. The first freedom fact is that, on average a Correction occurs about once a year. So don't get sucked into a lot of the drama that you see on different news and things like that.
It's just a part of the pattern it goes up and down so don't be scared if a correction happens. It's normal, it's natural and it pretty much occurs every year freedom fact number 2, less than twenty percent of all corrections turn into a bear market. Freedom fact number three, nobody can predict consistently whether the market will rise or fall. Do not listen to people that claim that they know what's going to happen to the stock market because they don't.
Nobody can predict the future it's a delusion to think that you or I. Or anyone can successfully time the market by jumping in and out at the right time. Freedom fact number four, the stock market rises over time despite many short-term setbacks. The S&P 500 index experienced an average intra year decline of 14.2 Percent from 1982 to the end of 2015.
In other words, these market drops were remarkably regular occurrences over 36 years. Once again, nothing to be scared of just a matter of winter putting on it's usual seasonal appearance. Display a 14.2% Average drop within each year, the US market ended up with a positive return, 27 of the last 36 years. That seventy-five percent of the time! Now it's important to take note of because it reminds us that the market generally rises over the long run.
Even though we had a huge number of potholes along the way. Freedom fact number five historically bear markets have happened every three to five years but here's what you need to know. Bear markets do not last. Just like winter never lasts, spring always follows.
The most successful investors take advantage of all that fear and gloom because they see everything as being on sale. The best opportunities come in times of maximum pessimism. Freedom fact number six, bear markets become bull markets and pessimism becomes optimism. Most people remember how fragile the world was in 2008 when banks were collapsing the stock market was in a freefall and the real estate market was at a all time low.
People were panicky, they were full of fear, but take note of what happened after that. The market hit rock bottom march 9th 2009 and after that the S&P. 500 Index surged by 69.5 Percent over the next 12 months. That's one hell of an opportunity, that's a spectacular return and by late 2016 SMP 500 has risen by an astonishing 266%! Since its low point in march 2009 So think about that when people were panicky and selling and getting rid of it because they thought the world was coming to an end.
They really were missing out of a fantastic opportunity because everything was on sale. They should have just bought and bought and bought and bought. Look what happened in just six or seven years, whatever they invested would have gone up 266%! Here is a clear example why Warren Buffett has been known to say "be greedy when others are fearful," and as a little fun fact, me and warren buffett have the exact same birthday. Freedom fact number seven, the greatest danger is being out of the market.
The trouble really lies in sitting on the sidelines. Even if it's just for a short period of time. Even if you invest in the market with bad timing! If you invested two thousand dollars every year for 20 years, starting in 1993. Look at the large difference between if you just kept it all in cash, in comparison to all the different options going into the market.
Even the bad timing is about 21,000 dollars more than just leaving it in cash. Next let's get into another part of the rule book which is fees. Far too often people are overpaying for underperformance. Being that nobody can predict the future it turns out that the professionals aren't really any better at predicting the future than the rest of us.
So what a lot of people make the mistake of doing is, they go to seek a financial advisor and ninety percent or more of the time it's a mutual fund broker and those people are not legally bound to be in your best interest. For an investor in a actively managed fund, the combination of hefty transaction costs and taxes is really the silent killer. Which will just quietly eat away at all of your funds returns. Paying more than you need to pay whether that be fees or taxes is really insane and to be that lazy is going to be very costly in the long run.
A great antidote is index funds. Index funds take a passive approach that eliminates almost all trading activity. Instead of trading in and out of the market. They simply buy-and-hold every stock in the index such as the S&P.
500. Which will include companies like Apple, Microsoft, johnson & johnson, etc... What's great about index funds is that they're almost entirely on autopilot. They make very few trades and the transaction costs and taxes are incredibly low.
Having some cash on hand isn't a bad idea and it's pretty handy if the market falls. Cash doesn't earn a return so it will underperform stocks over time assuming that the market continues in general upward trajectory. So let's go back and discuss these mutual funds again. When you look at the result of what they do on an after fee, after tax basis, over a reasonably long period of time there's almost no chance that you'll end up beating the index fund.
It will just simply out beat it, because the index funds don't have an overwhelmingly large amount of fees and taxes. So for example, would you buy a two-dollar coffee for $25? NO, because you know you can get it for 2 dollars Here's another way to look at it, to put in perspective, an actively managed fund that charges you say 3% a year is 60 times more expensive than an index fund which charges you only about 0.05% So imagine, going to buy that two-dollar coffee and instead it's going to cost you $120!!! For the exact same cup of coffee. You would never buy that coffee, but a lot of people do this every single year with mutual funds. Now let's get into another area of the rule book which deals with the 401k.
401K plans were a beautiful invention. It was created in 1984 which gave the average person the chance to build wealth, by making tax-deductible contributions to a retirement account directly from our paychecks. Nearly 90 million Americans participate in a 401k plan, to put that in perspective, only 75 million Americans own a home. Six trillion people are currently investing for 401k's.
It's the single most important vehicle for financial security in the US population. But i wonder if you know what happened, because somewhere along the line that dream got the derailed with trillions of dollars up for grabs, financial firms dreamed of countless ways to dip all of their fingers into the pot. For almost three decades the companies providing 401k plans were not even required by law to disclose how much they were charging to the customers. It wasn't until 2012 that the government finally forced these firms to make detailed discloses how much they were extracting from your statements.
What's interesting is that 71% of people enrolled in 401k's, think that there are no fees and 92% admit that they have no clue what they are. Ignorance is not bliss when it's dealing with your money. Ignorance is very expensive and it can leave you in poverty, broke, and stuck working for your entire life. The vast majority of plans are characterized by huge broker's commissions.
Here's a short sample list of many categories of fees that were invented, there's the investment expensive, communication expenses, bookkeeping expensive, trustee expensive, legal expenses, and so on and so forth. The average worker who earns about 30 grand a year and saves five percent of their income over a lifetime, this worker would lose over $150,000!!! To fees! That's 15 years of income. There are great alternatives though. A man named Tom Zgrainer is a CEO of a company called American Best 401k.
Tom told Tony that the 401k business is a largest dark pool of assets where nobody really knows how or whose hands are getting greased. Fortunately by contrast America's best 401k is entirely transparent. They don't accept kickbacks from mutual fund companies that are just trying to get them to sell overpriced funds. Instead they offer inexpensive index funds from firms such as vanguard and dimensional fund advisors.
Tom's company charges one fee, with no markup or hidden costs, it will save you a heck of a lot of money. There's over 300,000 financial advisors in America who are actually just brokers. Brokers who are paid to sell financial products to customers, like you and me, in return for a fee. The trouble is that these people work in a system that's beyond their control, a system that has tremendously powerful financial incentives to focus on maximizing profits above all else.
So who do you turn to? The answer is a fiduciary, but not a hybrid fiduciary this is important. A fiduciary is someone that is legally bound to be in your best interest, who you only pay for financial advice. There's also duly registered advisors out there which can play both roles, be a fiduciary and a broker. So make sure to check your advisors credentials.
So there have a brief sum up of part one, which is the rule book. Where you've learned the power of becoming a long-term investor who doesn't trade in & out of the market, who stays on course, not getting shaken and stirred by the crashes. You also learned the vast majority of actively managed mutual funds overcharge for underperformance. Which is why you are so much better off with an inexpensive index fund.
You'll also learn that excessive fees have devastating effects like termites eating away at the foundation of your financial future and you also learn how to find an independent financial advisor truly an incredible financial rulebook to learn how you can master the game of money. Now let's move on to the next section which is financial playbook. A playbook that empowers you to put your personal action plan in place right now the first thing we're going to talk about in the playbook is the core 4. All these great investors adhere to a similar 4 principles.
A core 4, and not only do they know what these principles are. They put it into action, remember execution is everything. If you just watch this video and read his book and keep it in theory but don't actually start saving and investing. Then you're not going to move forward with that, applied knowledge is always greater than just knowledge.
The 1st core is, don't lose, some of the best investors in the world are obsessed with avoiding losses. The second core principle is to seek asymmetric risk / reward. What that basically means is finding things that give you the greatest reward with the least amount of risk. So imagine if you were able to reduce risk while maximizing return that is what these great investors do and that's what you can do as well.
Principle number 3, tax efficiency there's only one number that truly matters which is the net amount that you actually get to keep. If someone goes up to congratulate themselves on a great investment return without taking into account the impact of taxes as well as fees, then what they are actually doing is demonstrating self-delusion. Self-delusion is a very expensive habit so adhere to core principle number three and have tax efficiency. Don't pay more than you have to and the last principle.
Principal number 4, diversification. We've all heard the saying don't put all your eggs in one basket, it's very true, but even when you separate it into separate baskets, you want to separate those baskets into separate baskets as well. There's four important ways that you can diversify effectively, the first diversify across different asset classes. So avoid putting all of your money into only stocks, or only real estate, or only one company.
The second is to diversify within asset classes. So if you want to do stocks don't put all of your money into Microsoft, don't put all your money into apple, or even with real estate don't put all your money into piece of real estate that's right on the beach. The third important way to diversify effectively is to diversify across markets, countries, currencies all around the world because we live in a global economy so don't make the mistake of only investing in one country. The fourth important way to diversify effectively is to diversify across time, because if you keep adding to your investment systematically over months and years you'll reduce your risk and increase your returns over time.
Diversification is like your insurance policy against financial nightmares. What it can do for you is decrease your risk and increase your return. Ray Dalio, the financial genius that's the head of Bridgewater. He's the person in "Money Master the Game" that is attributed for creating the "all-seasons" financial portfolio.
Where no matter what is going on in the market he's still succeeding, winning and getting a great return. Ray Dalio emphasizes in the book that by owning 15 unrelated investment you can reduce your overall risk by about eighty percent and you can increase the return to risk ratio by a factor of five. So your return is five times greater! So for your protection be sure to diversify. Once you're investing and you're dealing with the market going up and down you're dealing with corrections and the bear market.
There's four words that can be very expensive you want to be aware of and avoid, the words, "this time it's different." Far too often when there's a dip in the market or if it turns into a bear market or there's a recession everyone is dramatic and they think that it's the end of the world and that we're never going to bounce from it & it's completely different. When in reality if people were patient and they paid attention to what actually does happen in the market throughout history then they will realize that it's actually the greatest opportunity. When you're dealing with recessions and bear markets, because everything is literally on sale. Imagine if your dream was to go ahead and buy a beautiful beach house and that beach house cost you $500,000 but instead it was on sale $150,000! Would you complain and think that it's the end of times or would you think oh wow that's a great deal let me go pick that up.
That is what smart investors do all the time during bear markets, & recessions. The reality then during recessions and bear market it's truly the greatest opportunity to grow. A balanced and diverse wealth portfolio will help you through hard times like in 2008 when the S&P 500 initially went down 38-percent. Investment-grade bonds rose just under six percent so when one drops, the other goes up.
You can outlast many of the financial storms that are inevitable simply by diversifying and having a well-rounded wealth portfolio. Now let's quickly check out some of the different major asset classes that you can use for your own wealth portfolio. One is stocks. Stocks is not a lottery ticket what stocks are is when you buy stocks you become a shareholder, an owner, of a company and a lot of the stocks will pay dividends.
Bonds is another type of asset which you're basically making a loan to a company or government or something like that, typically you don't have a high return rate. There's also alternative investments which would be like real estate investments, trusts, master limited partnership (MLP), there's also hedge funds which are not recommended to go forward within the book as well as gold. Gold is surprisingly not recommended either and it's kind of interesting Warren Buffett says that gold gets dug up and then we melt it down, dig another hole and bury it again, then pay people to stand around guarding it! It has no utility and you can't make any money from gold it just sits there and every time without exception the price has ultimately collapsed. Historically stocks, bonds and real estate have all outperformed the gold.
When you're making your wealth portfolio it's really important that you have something that matches your personality. Everybody has different goals, everybody has a different tolerance for risk. So it's very important when you're meeting with your financial advisor, you're pure independent fiduciary, that they understand you & they know what your goals are in life. They can design a portfolio around it so that you can obtain the certainty that best suits you.
I want to keep a lot of the more in-depth and refered base information, that Tony puts together, in the book for you to discover. We definitely have to get into the last section because it is very important and might actually be the most important part of the entire thing. Which is the psychology of wealth. There's really one enemy, one barrier that stands between you and your financial success.
Do you know who that person is?? It's you, and once you know how to silence the enemy from within you, nothing can stop you. It's quite amazing that eighty percent of success is psychology. Only twenty percent is mechanical. On this video we went pretty deep together on the mechanics.
Covering the rule book as well as the playbook. If you're still watching this, I'm grateful for it, it's been quite the journey. I commend you for your thirst for knowledge, to master your financial state. Remember eighty percent of your financial success is your psychology.
It's up to you to make it happen, are you ready? To learn what to avoid? Here we go Tony Robbins brings us six money mistakes we as investors make and how we can avoid them. Mistake number one: seeking confirmation of your beliefs. The best investors welcome opinions that contradict their own. The solution to this mistake is to ask better questions and find qualified people who disagree with them.
Mistake number two: mistaking recent events for ongoing trends why most investors buy the wrong thing, exactly the wrong moment. The solution, don't sell out rebalance. Mistake number 3: overconfidence, get real with yourself. Overestimating our abilities and our knowledge is a recipe for disaster.
The solution is to get real and honest with yourself. Mistake number 4: Greed, gambling and the quest for only home runs. It's very tempting to swing for the fences but victory goes to the steady survivors. The solution is to recognize that this is a marathon not a sprint.
Mistake number 5: staying home it's a big big world out there. The solution, expand your horizons. Mistake number six: negativity and lost aversion. Your brain wants you to be fearful in times of turmoil do not listen to it.
The solution to this is to be prepared and to know what you're doing. So there you have it, six mistakes to avoid. This book and your applied knowledge can bring you to financial prosperity. In Tony Robbins words that simply isn't enough, you have to strive to achieve real wealth.
By making the decision to achieve real wealth it might be the most important decision of your life. Real wealth is the opposite of suffering. The goal is not to become the richest person in the graveyard. The goal is to live an extraordinary life.
Living a life on your terms where you're achieving, contributing, & happy. The first step to achieving anything that you want is to focus. The second step is to go beyond hunger and drive, to consistently take action. The third step to achieving whatever you want is Grace, and as important as achievement is there's a second skill that you need to learn to master if you want to create an extraordinary life.
The skill is what Tony calls the art of fulfillment. In order to have any type of sustainability with your happiness you have to be a master of your internal world, not just your external world. You also have to focus on contribution. Do not give with the anticipation of getting back.
Recognize that when you're driven by a desire to contribute it brings us a great deal of fulfillment. Make the choice to live in a beautiful state. You really have two options beautiful state, and suffering state. The suffering state is when you're feeling stressed out, frustrated, depressed, terrible, overwhelmed, fearful, angry, etc...
A beautiful state is when you feel love, gratitude, ease, your creative, growth, curiosity, anticipation, joy, and so on. The mental and emotional state in which you live is ultimately the result of where you choose to focus your thoughts if you're ever experiencing suffering it's really just a result of an undirected mind that's precondition to just look for problems. To avoid all of these negative states of suffering you can start by being appreciative of what you have. Go over everything that you're grateful for.
Say what you're grateful for, step into the feeling of what it feels like to be grateful for what you have. List three things off, morning and night, it could be micro small like, I love coffee, or it could be something more grand like I love my children or something like that. Be grateful because when you're grateful and appreciative of what you have you can't feel suffering. Let's be real, life is way too short and awesome to suffer and it could be a challenge we all go through those moments of suffering but it's up to you to take conscious action when you're going through states of suffering.
So flip yourself around and see yourself to be in a beautiful state and to feel yourself to be in a beautiful state. One of the most amazing things about this book is that hundred percent of proceeds go to feeding America. Each book purchase can provide up to 50 meals so by Tony Robbins actions, writing this book of financial mastery for the average man. The fact that all of that goes back to people in need truly expresses one of Tony Robbins core beliefs that he lives by.
Which is a secret, which is that the secret to living is giving. Thank you all so much for checking out this video, be sure to leave a like! Comment below what you found most interesting in this video and what your favorite Tony Robbins book & if you've seen him live. I've never seen him live but it's definitely on my bucket list. If you haven't already, subscribe to my channel for more awesome videos.
I'm sure if you're still watching this video is definitely achieved the goal of helping you level up and remember to always be learning, always be creating, and always be inspired! TridentLion #LevelUp Subscribe.
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