What comes to your mind when you hear the name Tony Robbins? Motivational speaker? Check. Peak performance coach? Check. Philanthropist. Check again. But what about a Financial Advisor? Well, not quite yet. When Tony Robbins published his book MONEY Master the Game: 7 Simple Steps to Financial Freedom back in November 2014, I was initially very skeptical about reading it. My thoughts were like this is going to be another book on personal finance and I’ve already read a lot of books on this subject. But shortly after its release, the book started getting some buzz and making so much noise, especially among financial advisers that I simply could not ignore it.
Most advisers found the book nothing special and aggressively criticized the author for presenting a lot of inaccuracies and biased information. Others said that the author is not qualified to give financial advice at all. While I agree to some extent with my “colleagues,” I would not be that aggressive and take the opposite side saying that this book is a great read and you may learn a lot, especially if you are just entering a path towards your financial independence. Yes, there are indeed a lot of controversy in the book. For example, insistent promotion of the author’s personal adviser firm and its services, a lot of “filler” and motivational information that is not directly linked to the subject of the book. If you are looking for a shortcut or a strategy on how to make quick profits – don’t waste your time reading this 650+ pages book. The book doesn’t reveal any information on this, neither it is intended to.
What Is This Book About?
The book begins with a lot of background and motivational information. If you have no problem with motivating yourself, you can easily skip a few chapters without losing any valuable information. However, shortly after the author finally starts getting into some details. Robbins begins with a statement that the “system” is pretty complicated and that the client simply do not understand how the “house” reaps profits whether the client wins or not. He shows several tricks used by mutual fund companies to blindside investor and how investor can avoid them. Having said that, he then starts to reveal the main purpose of the book which is to educate and set you up so you have an income for life. But how one can achieve that? The author insists on identifying your goals first and drafting a plan. Once done, you need to understand and apply several important investing principles, such as:
- power of compounding
- saving each period and investing this money (401k is a great tool for that)
- avoid expensive, actively managed mutual funds
- stick to passive investing
- asset allocation and diversification
- be aware of taxes. Consider investing via tax-deferred plans, like 401k, IRA, or annuities
In addition, you need to do some work along the way, like rebalancing your portfolio at regular intervals. This is where hiring a fiduciary adviser makes sense. A fiduciary adviser is the one who puts client’s interest above his own and acts solely in the client’s interests (something we cannot say about brokers and other commission-based advisers).
Almost from the beginning of the book the author keeps you thrilled by promising to reveal a tool where 100% of principal is protected and allows you to participate in up to 90% of the upside of the market. A tool that 1% rich utilize and has been called the “rich man’s Roth.” As it turns out later, the author refers to a private placement life insurance, which allows for unlimited deposit amounts, no tax on the growth, no tax when accessed, and no tax when passed over to heirs.
Finally, another important feature of the book is the series of short interviews with investment professionals, like Ray Dalio, Charles Schwab, Jack Bogle, Paul Tudor Jones, Kyle Bass, Mark Faber and others. Even though each interview is pretty short, I’ve found some ideas shared by greatest investment minds are very interesting and worth putting your thoughts into it.
Who Is This Book For?
This book is about understanding general investment principles, tools and vehicles, ways to enhance your returns and avoid common mistakes that can cost you a lot over the time. It is not for those who are familiar with investing and have been doing it for a while. It is not for DIY type investors either. Rather, this book is for those who are just starting out or simply want to take control of their financial life. If you consider yourself a novice investor or want to find out how you can become a better investor, I highly encourage you to read this book. I think it will be a good source of knowledge and will help you shed light on disguised “traps” that you will inevitable experience on your way to financial freedom.