Tony Robbins' 6 Rules Of Investing

tony robbins is a best-selling author entrepreneur life and business coach who's worked with top athletes celebrities precedents and top business leaders he's impacted millions of people with his live events programs books and philanthropic endeavors tony is the chairman of a holding company comprising of 50 privately held companies with combined cells exceeding six billion dollars per year he worked with and interviewed 50 of the top minds in the world of finance such as Warren Buffett Ray Dalio and John Bogle to extract information on how to win in the investing world so here are tony robbins six

rules of investing number one you will never earn your way to free you know I always tell people we're all financial traders my peoples I'm not a financial trader yes you are you're trading time for money yeah and that's the worst trade you can ever make in your life somebody who's wealthy has made money they're slaves they're no longer the slave to money and the way they do that is they figured out how to become an owner and the way you do that and the most simplistic way they even taught at my first book what

you have to decide there's a percentage of money that you're gonna keep forever you're not gonna give it to Kate Spade or Ferrari or anybody else you can do that too but there's a percentage of that income that never will be touched that you will grow and compound it will provide income the rest of your life so you don't have to work now when I was growing up everybody's goal was get rich enough so you never have to work now like all my friends are fifteen eight-year teen years my senior people like Steve Lennon but

most Las Vegas he's like 74 Warren Buffett's 85 Peter Gruber and one of my dearest friends the world owns the Golden State Warriors the LA Dodgers were partners in the LA FC football team in LA brilliant guys 74 years old and they're all working harder now than they ever were and they don't have to work so the goal is make enough money so you don't have to work and then you'll do what you love and you'll pour your time and energy into it but you have to make that decision number two take advantage of compounded

growth people think that the way you get free financially free or wealthy did you get this big score somehow I'm gonna make a bunch of money or somewhere I'm gonna make this investment in Apple and it's gonna triple and that's what's gonna make me wealthy but all the research shows in reality people earn huge sums of money rarely keep those huge sums of money and very few people really get to the number that they're really after when they're trying to make that big score and so I really want to show you much simpler way there

are literally millions of people around the world that have become millionaires and they've done it really slowly and easily because they've just tapped into a very simple power and that power I know you've heard of called compound interest or compound growth the idea of growth upon growth multiplying itself let me explain what I mean early in the book I decided one of the people I wanted to go visit with was a man named Burton Malkiel Burton Malkiel Herbert is an amazing professor who's at Princeton and I wanted to go see him because he wrote a

book has become kind of investing classic called a random walk down Wall Street and he wrote it in the 70s and it's still popular today and in it he kind of shook up the investment field because he came up with this idea saying you know what people should be able to have a tiny bit of money and owned all of the stock market and not pay these huge mutual fund fees that are usually hidden that are eating away at your ability to grow and compound what you have into real wealth and he was one of

the earliest people to ever come up with this idea of promoting the idea of an index fund an index fund again is really simple instead of buying this Apple or PepsiCo or coke or whoever the case may be you can actually buy this index which mimics the entire stock market so you get a micro piece of all these companies all the best companies for example in the S&P 500 or the standard Poor's 500 if you're familiar with that and so his idea has turned into a seven trillion dollar year business and another person I got

to spend quite a bit of time with that you learn about here in the book and here with me is gentlemen started Vanguard that's Jack Bogle he took this idea and he bit his fortune on it both of these men understood something and when I sat down with Burton Malkiel the first thing I said was look I know your straight shooter he could guy definitely shoots from the hip he doesn't care what people think I used to tell me what's the single biggest mistake that individuals make that investors make in their life and he said

Oh need beyond a shot of its a doubt as they don't take full advantage of the power of compounding he said Einstein said it was one of the single greatest inventions of humanity understanding it can change everything in your life and everybody says they understand it he told me but very few people tap it he said understanding something intellectually is not the same as doing it if you're doing it then you know it if you understand intellectually you know like I've said before that and three dollars will almost buy a Starbucks bunka coffee so what

you really have to understand is how it works and saw I asked them said what's the best way to teach it and he went into this riff and his riff was to tell me the story about William and James he said told me should give you a real example let's take two guys William and James and let's say William starts out at 20 years old and he starts taking a little bit of his money and just locking it down and sitting aside and investing it let's say he takes three hundred dollars a month four thousand

dollars a year and he put that aside and he doesn't touch it and he puts in the stock market and let's say over time he averages ten percent and let's say he doesn't an index fund so he's not being taxed continuously so it grows tax-free until the time he's gonna take it out and let's say he makes that investment stay with me now Willie makes that investment from the time he's 20 puts away that three hundred bucks a month at four thousand till the time he's forty he never makes another investment again that's it and

then we see what he has at age sixty five and then on the other hand he has a brother in James and James he doesn't get started when he's 20 he doesn't get started when he's 30 he waits till he's 40 and then he starts to say God I gotta start doing something she does the exact same thing his brother did he starts putting away $300 a month $4,000 a year roughly he gets the same exact return let's say of 10% in a tax protected environment and at 65 from 40 to 65 is 25 years

so he spends 25 years putting money in the system they give it four grand times 25 years a hundred thousand dollars his brother William he only did this for 20 years 20 to 40 20 years times 4,000 80,000 so the second brother William and James James put in significantly more money into the system done it longer but at age 65 they both got the same rate of return who do you think is doing better off I know you know the answer but the real question is how much better off and that's that most people have

no clue of William who started earlier and quit earlier has six hundred percent more money not twenty percent not fifty six hundred percent more money at age 65 both these men who got the same rates of return but one started earlier and quit earlier he has two point five million dollars for William and James who started later and put more money into the system but he started later so he got less compounding he end up with four hundred thousand dollars a 2.1 million dollar difference now that could be the difference between total financial freedom for

somebody or do it okay for a while and at 70 having to get a job to be a you know somebody greeting people at Walmart see this understanding of compounding is how you can free yourself from this idea that somehow you've got to make this giant score because the more you try to create that giant score even if you get it usually isn't capped how can I say that because I've been in this business working with people some of the greatest entertainers actors musicians sports stars government officials who go off and make money afterwards and

I can tell you one thing rarely do they keep it because they've never understood how to really tap in this power number three market crashes are a blessing in disguise so what you got to know is corrections happen every year you got another couple months god no it's 14% and you won't lose because eighty percent time doesn't go to bear now what about the bear the bear market it happens to give you an idea in the last hundred years every three to five years you've got eight without one we're way overdue yeah though in modern

years last thirty years is about every five years the average length of a bear is one year the average drop is 33% 1/3 of those drops go 40% or above that I don't care how well-prepared you are that's a scary thing yeah but it is the greatest opportunity in your lifetime to go from wherever you are financially to where you want to be I hope your audience is listening right now hear me if you want to leapfrog and you're a millennial and you think there's no future or you're you know a baby boomer and you

think you're too old that's too late the greatest gift you have is coming I know it doesn't sound like it this is not positive thinking [ __ ] this is the truth Wall Street the stock market is the only place that when things go on sale people freak out if I said you like Ferraris sure if I said to you four R's go on sale for 50% off awesome but when I tell you apples on sale for 50% of you ever having a deal here what's wrong the mall world's coming to it if you think

about it hold of you 3333 so let's assume if you were 35 you lived at 85 you got in 1552 years ahead of you that means you have 52 more corrections to live through or hey that means you're probably in those 50 years gonna have 10 more bear markets to live through if you're gonna have a gut checks every time where you're gonna leave out of it right if you didn't participate cuz you thought all the markets too volatile I can't trust at all it's tough you missed two hundred and fifty percent return in the

last eight years hmm I mean you've missed out on everything while you're waiting for things to be better and if you won't do it with like this when it crashes you're not gonna get in there so here's the good news about the bear good knew about the bear average ones a year could be longer but that's the average gonna be shorter but here's what's cool every single bear market in the history of the United States has led to a bull market meaning right afterwards so 2008 this plummeting what happened in 2009 up sixty-seven percent line

here I can show you every single bear market and the next year when it comes out it's this explosion now that's not true in every mark of the world it's true for two centuries in the United States so that's why Warren Buffett says I want to be greenie what people are afraid and I want to be afraid when people agree if you remember 2008 he was telling everybody by he was having the time of his life haha bye bye-bye everything's on sale so what you have to do to become unshakable his turn when I leave

the metaphor I uses the turn the snake into the rope meaning we all know the story it's the middle of the night you're walking through the yard or someplace and you see a snake and you fruit that you pull back you come in the morning and it's a rope once you know it's a rope you're never afraid again yeah I want to take four people investing and show them how to turn that snake into the rope it really is one final stat on all this people always saying you started to bring it up timing mmm

all right time it right now things are too expensive all the way people could say in that four eight years is there gonna be correction yes but when it corrects you just you want to dust again you'll get dollar cost averaging if you paid a little too much here you'll pay paying less here it'll bring the average price to a reasonable places and allow you to succeed number four diversify your investments i sat down with a famous ray value right right and I prepared for 18 hours for that interview because he's a genius and there's

not that much on him I wanted to absorb it all so I got every little bit of it sat down with and it turned out ray was a fan of my work which I was touched by 20 years ago I guess he listened my programs he was very generous with his time and we spent these three hours and in three hours when I got to the end I said to ray I said listen I really want help the average person so I got a question for you I did this with everyone I said if you

couldn't give your money to your children any of it and all you could do would be give them a portfolio or a set of investment strategies or instructions and they were going to start over and build it what would it be and he said Tony I spent a decade figuring that out all my money is already there my kids money is there my money philanthropy when I'm gone is there because I'm not gonna be here and I want something little do well in the future and I don't know what the futures gonna be markets are

gonna always change I need something that could work in any mark and I call it my all-weather fund most of us in the business are familiar with it a little bit and so he explained it to me and I have a good understanding and I said I get it so what you're saying is the reason why this was obsessed him why is he defined a balanced portfolio in 2008 I got nailed on both sides why did that happen in 2000 everybody says portfolio theory this is supposed to protect me and it didn't work but he

said as soon as things get better no one talks about it we just forget about it happens again happened in 2000 happened in 2008 he said I figured it out when you have a 50/50 portfolio right that's 50/50 of where you put your money in assets 6040 5050 however you look at balanced portfolio right but he said the problem is that's not balanced risk this is where people are crazy I've seen people write things up they see this in the book and say Tony Robbins is promoting first of all I'm not promoting anything every word

in this book is from the best investors on earth anything that's from me is about the emotions that I know for 36 years that's been my expertise these are their views but I'll tell you what's amazing he's a Tony when you have stocks and bonds half and half you're not equal because equities are three times more volatile so your risk is ninety five five number five fees matter how old are you 31 31 okay so let's assume you and a couple buddies at 35 names put aside a hundred grand and you manage not to add

any more money but to grow at 7% spite of ups and downs in the market and you're 65 how much money do you have well if you paid 1% in fees over those 30 years 100 grand became 574 thousand bucks not bad for never adding another dime right if you had three percent of these have the same growth but three percent of these you now have three hundred oh and twenty four thousand half as much quarter million dollars seventy seven money and you were the same return it was just the fees so the world most

people you ask him what are your fees they have no clue right so I've created a site where people can go they can type it in you find exactly what your fees are and what you should be paying and it just it's highway robbery where in the world would you pay two thousand two thousand percent more for the same exact product you can only do it because the financial industry makes things so opaque so convoluted number six improve your psychology and it's 80 percent psychology and 20 percent mechanics meaning so many small businesses you know

the owner might be an incredible innovator maybe they write incredible code maybe they're a tremendous influence ER but they don't know the economic side of their business right and they find themselves getting in trouble because somebody's giving them financial information after the fact they don't have true financial intelligence to make decisions and they get caught up someone might be really great in finance but they're not any good in marketing so sometimes it's a skill problem but 80% of it you can solve those skills you can get those skills if you can change your psychology but

when you accept that oh my god the markets down or oh my god the economy and areas down when you allow the environment to control your psychology you're not gonna win there's an interesting guy named Mel Fisher you may remember from back in the 90s he was that the name lingers in your mind he was a guy that spent I think it was 27 years if I remember correctly looking for the Spanish galleon that was supposed to be filled with gold and he found it after 27 years now here's my question for you Jim yeah

five years into it you've worked every day for five years and you found nothing what are you gonna do and how you gonna raise more money because you have run out of money ten years into it fifteen years into it 20 years into it so I say to people in business I say to them you understand psychology here's the biggest challenge for most businesses they think they've maxed what's possible because they think they've tried everything once you believe that your belief controls you and you miss the innovations you miss the answers this guy found that

gold because he had three beliefs first belief was there's a treasure out there and he was certain it was out there even though he didn't have any absolute evidence and that certainly drove him but if you knew there was treasure in your business that's not enough you gotta also believe I will find it and he also have to believe it's worth it right and without those three beliefs he never would have found it and so changing the psychology of the leader is what'll change a business faster than anything else changing their skills will also do

it but lots of people the skill they don't execute and you and I both know you know executions more important than knowledge knowledge is trumped by execution every single day and that execution comes by changing the psychology alright guys make sure to hit the like button if you enjoyed this video and in the comments below let me know who you want me to cover next enter six rules of money series and you might inspire the next video and as always thank you for watching and I will see you in the next video