Book Review

MONEY, Master the Game, 7 Simple Steps to Financial Freedom

Anthony ('Tony') Robbins is best known as a motivational and seminar speaker, personal counselor to celebrities, and a late-night television infomercial regular. Writing and promoting a number of best-selling books and programs, leading with "Unleash the Power Within," Robbins has expanded his footprint into the personal financial education publication genre.

Within this foray, joining the likes of Suze Orman, Jean Chatzky, and David Bach, Robbins released, MONEY, Master the Game, 7 Simple Steps to Financial Freedom via a hardcover 656 page book. Robbins outlines his seven money strategies to achieve financial freedom.

I have twice read the book and applied Mr. Robbins' strategies to my own personal wealth-building action plan. Financial counselors will benefit from the tenets of his book.

Why Did Robbins Write a Money Book?

Robbins believes that his life path is to empower individuals in order to create massive positive global change. The "change" is to eliminate hunger, increase literacy, and inspire hope. He suggests that these paradigms can be accomplished via personal financial freedom.

Although many would agree that changes begin with thought and emotional positivity, the fact remains that the engine of financial change must include an asset. An asset, within the personal finance genre, is money. Throughout my reading of MONEY, Master the Game, I was looking under the proverbial car hood for the engine schematic design.

I have used Robbins’ personal empowerment programs in the past. I didn't need another motivational speech. I wanted to discover additional financial resources that I could add to my mental portfolio.

Robbins has worked with and counseled many superstars and celebrity experts. He has gleaned many sound financial freedom strategies from these clients as well. His advisory financial A-Listers include:

  • Sir John Templeton, an American-born British investor, banker, fund manager, and philanthropist
  • Ray Dalio, an American billionaire investor, hedge fund manager, and philanthropist
  • Mary Callahan Erdoes, Chief Executive Officer of J.P. Morgan Asset & Wealth Management, a global leader in investment management and private banking with $2.8 trillion in client assets
  • David Swenson, an American investor, endowment fund manager, and philanthropist
  • Carl Icahn, an American businessman, investor, and philanthropist
  • Sir Richard Branson, an English business magnate, investor, author and philanthropist

The single common thread among these financial giants is that they all believed in generating and increasing their capital investments…yet they all practiced a fundamental mindset of the application of don’t lose money!

Robbins states that the investment world is complex and this complexity is a purposeful creation of the very money managers who are employed to help us. "Complexity is the enemy of execution," he writes. Much of this complexity is wrapped up in pension-loaded mutual funds and target-date funds.

As financial coaches, counselors, and planners, we know about and decipher the finite details of fund expenses and performance...yes? Robbins’ book suggests, and I concur (after practical research and application), that 'we financial gals/guys truly do not!’ A mutual fund prospectus will state expenses, yet the prospectus is not truly transparent, clear, plain-spoken, and does not provide full disclosure.

Robbins says, "By the way, when I began this adventure, people told me that I was crazy. Many so- called experts—and even friends!—warned me [that] I was nuts to try to bring the complex world of finance to a wide audience. Even my publisher begged me to write about anything else. But I knew I could pull it off if I found the best voices to guide the way. [p. 20]…This book is committed to one primary outcome: to set you up so you have an income for life without ever having to work again. Real financial freedom! [p. 30]

Money Mastery, Breaking Through & Becoming an Insider

Robbins posits that we, as investors, give up too much control over our money. We do this by placing our "nest eggs" into a management arrangement with a broker, planner, or mutual fund manager. All of these management entities charge a fee. Yet how many of us really understand the fee schedules, why they are assessed, and what impact does the assets under management (AUM) fee have upon our portfolio sunset.

One example provided by MONEY, Master the Game can be found on page 107. The Impact of Fees, $1M invested at 8% x 30 years: After 30 years, the $1M invested would yield a portfolio value of $7.62 million, $5.74 million, and $4.32 million.

Why the disparity? Because of the AUM fees—the fees for these three, million dollar portfolios, were 1, 2, & 3% respectively. Parsing this out, an AUM fee of 1 to 2% yields a portfolio decrease of $1.869M; 1 to 3% AUM fee decreases a million dollar account by $3.291M. Bottom line: Fees Matter!

Security, risk, growth, and wealth preservation are terms related to finance that many of us—as financial practitioners—are familiar. In addition, Robbins offers another term to the lexicon, The Security/Peace of Mind Bucket. Robbins says, “This bucket is the slow but steady contender, like the turtle in the race for financial freedom. Because the turtle often wins! And you have to treat it like your sacred temple of investments--because what goes in here doesn't come out."

The Security/Peace of Mind Bucket contains a mix of one or two of the following eight financial instruments:

  1. Cash/Cash Equivalents
  2. Bonds
  3. Certificates of Deposits (CDs)
  4. Your Home [owned or mortgaged residence]
  5. Pension
  6. Annuities
  7. Life Insurance
  8. Structured Notes (an over the counter derivative with hybrid security features which combine payoffs from multiple ordinary securities, typically a stock or bond plus a derivative)

Summing Up the Money Game

"Create a Lifetime Income Plan!" writes Mr. Robbins. None of us knows how long we will live. I once saw a highway billboard that warned that the most important thing about money is "to not outlive your money." Tony states that there are three rules for investors:

  1. Go after Extraordinary returns (10%).

  2. Invest with Extraordinary safety (don't lose money).

  3. Seek Extraordinary low volatility.

Annual portfolio rebalancing and being mindful of economic factors related to inflation, deflation, and economics are recommended actions in MONEY, Master the Game. Moreover, Robbins’ mentor, Ray Dalio, supports an investment longevity strategy of planning to live beyond age 100…possibly as long as age 110 or 115.

Of all the strategies written within Robbins' +600 page book, the most esoteric of all is Step 7: Just Do It, Enjoy It, and Share It! We who are fortunate to have  wealth, health, and wisdom to invest for the future are called to introspection and to take stock of our assets.

Examples of Step 7 actions include having a positive futuristic outlook, being committed to cultivating personal wealth, giving and serving others, and execution of action. At the end of things, money is a means to an end, rather than the former. I highly recommend MONEY, Master the Game. I enjoyed it just as much on my third read through as I did during my first.

 


Andre Milteer, M.A., AFC® has been a personal financial counselor since 2015. Andre mainly works with US Army Service members and is a Texas-Certified Mathematics Public School Educator. Milteer applies the financial strategies of MONEY: Master the Game, into his personal finances as well as in his junior high school classroom.

The Standard

4th Quarter 2018


Thank you to this issue's contributors:

David Allen Ammerman

Jerry Buchko, MA, AFC®

Lori Mann, AFC®, FFC

Andre Milteer

Brent A. Neiser, CFP®, AFC®

Margaret S. Sherraden, Ph.D.

Michael G. Thomas Jr., Ph.D. Candidate, AFC®

Rebecca Wiggins

 

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