In the following, my notes to Tony Robbins book Money – Master the Game are listed. A quick summary for the people out there who want maybe buy this book and want to know whats inside.
#1: Asset managers
Most asset managers can’t beat the market, even if they say. 96% of mutual funds don’t beat the market for a consistent stretch of time. The market is a scale that is always in balance.
#2: Cost Average
Take 10-15% of your income every month, whether the market is up or down. Use the Cost Average Effect. The longer the investment horizon, the greater the potential compound interest effect on the initial value of the investment.
#3: Automate your investment
Automate investing or you probably won’t do it. That’s the key. It’s a lot of work doing it two times a month for 20 years. You will forget it sometimes. I personally use ETF savings plans, because they are debited directly 2x a month from my bank account. Tony Robbins mentioned Schwab in his book.
#4: Index investing
He mentioned, that it’s hard to beat an index the long term. His example is the “S&P 500“. You can invest completely passive. Even if a company which is in the index goes bankrupt, it hardly weighs in the index. The purpose of a stock exchange index is to provide representative documentation of developments on the respective submarket.
#5: Avoid mutual funds
Avoid mutual funds! The banker wants you to buy funds because he earns money with it. It costs regularly and the return is less due to the costs incurred by the banker. Do it yourself. Be your own banker.
#6: How much money for financial freedom
6) Do not aim for a sum until the end of your life, but for permanent interest. A system must be created that supports itself. People are getting older, you don’t know how long you will need it. A rule of thumb says: Take your annual expenses, multiply by 25 and that’s the fortune you need to live on the interest.
#7: Fund manager VS. fiduciary
Fund managers are not your friend. It’s their job to sell you more so they keep their job and get their commission. Find a good fiduciary for expert opinions. A fiduciary manages the assets of another person. He doesn’t care about your finances, so he has no interest in it.
#8: Save taxes
Robbins mentions the “Roth IRA” or “Roth 401(k)” which is generally not taxed under US law. Now, because I live in Germany that’s no option for me. Under German Law, selling real estate after 10 years or cryptocurrency after one year holding is tax-free.
#9: Rule 1: Don’t lose money
Rule 2: Repeat rule 1
#10: Tax is different. Depends on where you live.
Your money “disappears” faster in some places than in others. What do I mean by that: The cost of living and rents are different everywhere. Robbins mentions a website, where you can see the differences in the US. It’s not relevant for people outside the US but burns a nice picture to your head: Click
Betting on just one horse is the biggest risk, even with an index. Distribute your risk so that the total yield will decrease though for the start but is the better choice.
#12: Nonprofit organizations
He mentions websites like Vanguard and TIAA-CREF which are not profit-oriented. In other words, no conflict of interest. TIAA’s goal is to help their customers reach their financial goals. I personally write down all my costs in an app and report them every six months. The result is a saving rate of 60%. You can see here how I did it for two years now.