Today I’m going to share an interview I did with Tony Robbins about the coming financial trends and cycles that are going to affect all of us – most likely in the next few months. I know you’re looking for ways to get ahead, stay ahead and not get left behind as we go through massive changes in our world today economically.
I asked Tony about his predictions for the market, how he thinks the Trump Administration is going to affect the financial and business markets, who the “bad guys” are in the financial world that are ripping us off, some interesting stories about money and happiness – including his perspectives on a whole bunch of miserable billionaires and the advice he gives them.
Before we begin the interview – let me explain two reasons I’m sharing this with you.
First off, Tony is releasing a brand new book, “UNSHAKEABLE: YOUR FINANCIAL FREEDOM PLAYBOOK”.
I just finished reading it – and if you want to retire rich and wealthy, protect yourself, your family, your income, saving and investments or START investing, it’s outstanding and relevant to anyone.
Beside the information we’re going to share, Tony has some great gifts he’ll give to you if you choose to order the book including his “Personal Coaching Program” and $299 program, “The Ultimate Edge” for free!
The link to his book is at www.Unshakeable.com
Whether you choose to get the book or not, Tony has agreed to give away a pair of tickets to an upcoming “Unleash The Power Within” (or UPW) event – and I’m going to randomly pick someone at the end of this month to receive them. All you have to do to qualify is like, comments and SHARE a link to this post – do that right now!
To give you a bit of context as to how I connect with Tony in the first place, I’m going to very briefly tell you my story. In 1996, Tony completely changed my life when I was $250k in debt, overweight, recently divorced, buying groceries on my SuperAmerica gas card in St. Paul Minnesota… I bought Personal Power II from an infomercial, had it rush delivered, listened to 15 minutes of recording #1, called his office to sign up for all of his events on a brand new credit card and two weeks later, I was at an event in Hawaii with 3000 people jumping up and down and screaming and hugging each other. I was horrified because I was there to get FIXED by the magician. But once I got over the shock, I got into state, designed my life on a single piece of paper and less than a year later in love, turned my business situation around completely and my business was purchased by a publicly-traded company.
I owe my business and financial success to Tony’s trainings, products and events…
At the end of this interview, I”ll tell you the rest of the story about how I wound up meeting Tony in person 10 years later, helping him set up his studio, giving him and his team marketing advice and introducing him to Frank Kern, Jeff Walker, Brendon Burchard, Russell Brunson and working with him on several products.
Here’s the interview – ENJOY!
All right, Tony. Let's begin with the basics. The last book, which is Money Master the Game, you interviewed 50 of the most successful financial people in the world and you compiled what I think is several millennia worth of investing wisdom in one place. That book became a New York Times number one best seller, but what makes your new book unshakeable different?
I spent 5 years on that book and the first thing that's different is it's about 764 pages. I just wanted a few hundred. You can read this one in 4 or 5 hours, or a weekend and have a playbook to take you where you are, and where you want to be financially.
What really made me want to do this is I was interviewing the past Fed Chair, Alan Greenspan. He was the most powerful man in finance for 19 years under 4 different U.S. presidents. I was digging. We were talking about negative interspace. The first time in 5,000 years that you give the bank your money, and they charge you instead of giving you money. We were talking about all the different craziness in the market. What feds are doing. After about 3 hours privately and 2 hours on stage my last question to him was, “Look. With all we've talked about you're one of the smartest guys in the history of finance. Tell me, if you were the head of the Fed today, you made it back there, what is the first thing you'd do?” He had this long pause and he leaned into me. The whole audience leaned in. He said, “Resign.” I was like, “Oh my God.”
Then I talked to Howard Marks who’s a very famous investor. He manages a hundred billion dollars. He said, “Tony, if you're not confused by what's going on, you don't know what's going on.” I decided, look, we're in our eighth year now, it starts in about a week, of this bull market. The average bull market lasts 5 years. This is the second largest bull market in history, and it continues with upper growth overall. Like a trend. What's crazy is everyone knows it's going to crash. Everybody's got anxiety. There's all this volatility out there. Meanwhile there are people that have been waiting since 2008 saying the markets overvalued, it's gonna crash. It's up 250% since Trump was elected, whether you hate him or like him doesn't really matter. The markets up 14% since November.
What people have to understand is that I want to not only protect you, but I want to show you how to take advantage of the greatest economic opportunity in your lifetime. I tell people, “Look, I'm donating 100% of the profits of this book just like my last book. We're gonna feed another hundred million people. I fed 200 million people the last 2 years. You've got to get this for you and for them. You can't afford not to pick up this book and read this quick little book, because it'll show you what to do to win from the best on the face of the Earth.
Let me give you an example. Why don't people invest? They invest because they say that they have no money, because they've never made the discipline of taking some percentage, setting it aside and saying, “I want to be an owner, not just a consumer.” That little amount compounds over time. It gets them where they really want to go. The reason they don't get on the market … I've seen this happen especially with millennials right now, are really hurting because they're behind. They're behind because they have debt from college, they're not investing because they don't trust the markets.
Here's how you get over the fear and get to the reality. Let's talk about two things. Two things everybody's afraid of. Corrections and crashes. Corrections everybody understands what I'm talking about. Anytime the market drops 10% from its peak up to 20. A crash is whenever the market drops from 20% or more. It can go up to as much as 70 or 80% historically in terms of a drop.
Let's look at corrections. How often should a correction happen? Most people lose money because a correction happens and they sell. One of the great investors that I talked to, Warren Buffet said, “The market never took a dime from anybody. You took it from yourself. You sold when you should have hung on, and that's what most people do.” How often do we have a correction to deal with? Since 1900 … Check this out Mike … We've had one correction on average every single year for 116 years. Why should we be surprised when the market drops 10 to 14%? The average drop is 14%, and it lasts just under 2 months. It happens every year. It's like saying, “It's raining, oh my God! It's winter.” Some winters are short, some are long, but there's one every year. It usually lasts 2 or 3 months.
The financial market is on average 56 days. If you don't sell you're fine because it bounces back. Last January we had the worst opening of the stock market in its January history. In the history of the stock market. It was down 9% in a few weeks. Everybody's freaking out. The market dropped 900 points in a day. The wealthiest people were in Davos, Switzerland. They went CNBC on television. Everybody's freaking, “Is this the end times? Are we going for the crash? Is this the end?” And they brought on Ray Dalio. One of the guys I interviewed, smartest financial guy I think in the world, manages 160 billion dollars in assets. You have to have a 5 billion dollar net worth, and 100 billion to give him or he doesn't talk to you. Quite frankly, that was 10 years ago. Now he won't get to anybody no matter how rich you are.
I interviewed him and said, “What do we do, Ray? You're the smartest guy in the world. He said, “Read Tony Robbins book. I taught him my technique that's been right 85% of the time for 75 years. It's averaged in 10% return. When it's failed it's off 1.6%.” I tell you this story because he was up 2%. The market's about 9. That's part of what I teach. The big thing you gotta know is there's a correction every year. If you sell you're crazy, you're an idiot, and of course you're never going to want to be in the stock market again. 80% of those corrections … 80% of them never become a bear market. Never crash. They bounce back.
What about when it does become a bear? How often? Every 5 years like clockwork. We're behind right now. That's why everybody's preparing, saying there's going to be a correction at some point whether it be 1 year, 2 years, 3 years. Nobody knows. Here's what you gotta know. Those corrections come, the crashes then come. The average crash lasts a year. Not terribly exciting. Down 33% is the average. Some go 40% or more to give you an idea. It's not an easy thing to deal with, but it is the greatest … Please hear me, I hope your listeners will listen to me right now. It is the greatest economic opportunity of your lifetime when these occur. I know that sounds counterintuitive.
If you're a millennial, and you've got tons of debt from college, and you think you'll never be free. This is probably one of the most rare opportunities in your life where you can leap frog from being in debt to being wealthy. If you're a baby boomer and you never got started and you think it's too late. This is your chance to do it.
It's weird. If I told you that the stock market dropped 50%, most people freak out. If I told you your favorite car is a Ferrari, and Ferraris are on sale for 50% off you'd be out of your mind. If you can get Apple, Google, Alphabet, Microsoft … If you can buy these things for dimes, pennies on the dollar then this is the greatest gift of your life. Every single bear market in 2 centuries of American history has always been followed by a fall with no exception. Every year since 2008, when the market dropped 34 or 35% from pieces of profit was 50% briefly. The market jumps immediately in the next 12 months. In 2009 69% it went up. You were down 35, 45, 50, whatever your roll number if you weren't diversified. If you were diversified you weren't down that much. The next year you're up 69%. People need to understand that if you can educate yourself … What you can do in 4 hours with this tiny little book. The stuff that scares you, you will know more than the 1% knows, because most of the 1% doesn't know this.
I'll give you one more. People go, “What about timing?” You're like, “Right now the market's been going a long time, if I go in there I'll lose.” Really interesting study. Three fingers on that. Number one, nobody knows how the markets are really gonna do. Including all those forecasters. Warren Buffett told me, all those financial forecasters or market forecasters are only alive so they can make fortune tellers look good. I can't predict the market. They can't predict the market. It's totally completely absurd. You can still align with the market, and you can still succeed with the market. For these types of guys the real thing I found out is … Check this out.
In the last 20 years JP Morgan and Charles Schwab independently did a study. Here is the question. What about timing? What happens to somebody who gets in the market … We all know we should be in the market, because no investor has brought a bigger return than stocks. They also have the highest volatility. That's where the challenge is. Here's what they found out. In 20 years the S&P 500 is delivered a compounded annual return of 8.2%. Which means you'd double your money every 9 years. You'd get rich real quick doing that. It's phenomenal. You don't do anything. You check on your index funds. Let's say … Whatever investments you have will take once a year to rebalance. Once you learn this it takes 15 minutes a year. What do we got now? In 20 years 8.2.
What if you try to time the market? They decided to investigate that. They said if you missed the biggest 10 trading days, which no one knows when they're gonna happen. In 20 years, what would the impact be? You know what they found out? Instead of getting 8.2% your return is cut in half to 4.5. If you miss the top 20 days your return drops to 2%. If you miss the top 30 days you lost money. What are the chances of you and I, who have full time careers, jobs, children, family, impact, businesses. What are the chances of us picking the 10, 20, 30 best trading days of the year? Here's the really weird thing. 6 of the 10 best trading days in the last 20 years happened within 2 weeks of the worst days. When Donald Trump election night, and nobody thought he was gonna win and the market dropped 900 points. I called the broker and loaded up because I knew that it was just expectation. When it drops the market will return. The market will always return. It's brought us 14% in 3 months. It's just truly crazy.
Timing the market. Schwab did a study. They found somebody and said, let's pretend somebody got on the market on the best day of the year. The lowest price points of the year of the market crash and they bought then. Versus somebody who bought at the worst day of the year at the peak of the market. Versus somebody that did dollar cost averaging. Spent the same amount of money every month and so it averages out. Some stocks are high, some stocks are small. Somebody who put their money in cash. The person who made the most money was the perfect timing. The person who made the least money was the person in cash by almost 50% less money.
The difference between the worst day investing when you got on at the peak of the market and then crashed the next day, versus the best day was only 14,000 dollars after. The biggest mistake you can make is not being in the market. I'm not telling put everybody just in the stock market. You need a diversified portfolio. We explain that in the book. It's not that complex. You want to set it up. You want to ideally get a financial planner that is a fiduciary. Somebody that just looks out for your interests. They are legally required to do so. They cost less than 1%. It's like having a second business on the side.
Mike, you're a brilliant business man. You're doing incredibly well. Shit happens, you know. You get ill. You've been through that experience. Or you find yourself in a position where things change. There's new competition. There's new technology. It disrupts you. Everyone should have a second business with no employees that takes them 15 minutes a year. That's what Unshakeable delivers for anybody who wants to read it and act on it.
Wow. Well you answered a ton of questions in there, that's for sure. The bottom line, what it sounds like is, just get in the game and stay in the game. Stay in the game. I'm curious. What is the first topic …
One thing I want to say. Don't just get in the game, you've got to educate yourself, because the biggest screw up to your financial wealth is unfortunately people with experience who you give your money to. Because you know the old adage, the person with experience will end up with your money. You'll end up with experience. The fees that are out there. We have to touch space on the fees out there, because the fees will literally destroy your financial well being if you're not aware of them and you don't know how to counter them.
That's actually what my next question was, but I had one to stick in here in between it. I'm curious what your perspective is on the Trump presidency and how his administration, policies, behavior, may affect either the national or the world economy.
Well, if you look at how it's affecting the American economy, investors … Warren Buffett … I got to interview him. Warren Buffet did not vote for president Trump. He voted for Clinton. He said, “Half the time who I voted for president wasn't president.” Half the time it's not the person I want. That's part of life. You don't say, “I'm gonna move to Canada.” You don't put all your money in cash. You don't dig a hole, and say the world's coming to an end. I'll give you my perspective.
I interviewed president Clinton last weekend, and a couple months ago I had George W. Bush on. We had a really cool private conversation in which he told me what he feels, because he never criticized Obama as president. His whole thing was it's his turn. I really respected that. I said, “Just shoot me straight. How do you feel about the new president coming in?” He said, “I really want, obviously, my brother, I wanted him to be president. I thought he'd do a good job. He didn't campaign well enough.” He said, “but you know what? This whole idea of the world's coming to an end.” He says, “Tony, when Nixon was impeached, I said he destroyed the presidency. He destroyed our country, I knew it was over. I was so wrong. You've got to just come to realize even being president that the office is bigger than the occupant. I don't give a damn who's in that office. There's 3 branches of government. You can only screw so much up.” That's what our checks and balances system does.
You see it even happening right now with the travel ban, and a variety of different things. You can't just lose your president. You can find a bunch of owners. Obama did the same thing. They don't last. The way you get it done is by using all the branches of government. The legislation and the judicial system align with you. I think that people are overreacting. I don't care who you are. This person is still our president, and pushing against him is not going to make America stronger in any way, shape or form. Forget make America great again. Just get your own family taken care of.
I think we all have a responsibility to not see it worse than it is. If you're a leader you see it as it is, but not worse than it is. People that are always looking for an excuse why their life isn't working well look for something outside themselves to blame. See it as it is, not as worse than it is so you don't have to try. See it better than it is or you have no vision. You're not a leader unless you can see something better than it is. The third step is make it the way you see it. What I really think is that each of us individually need to focus on what we can do.
Yes, the president's style is certainly not what I would support. His style is even getting in the way of his substance. Much of the upset is the way he communicates. Many of the issues a lot of people would agree with, but when you communicate them by calling people idiots. When you communicate them by saying it's Muslims as opposed to screening for terrorists, then you're gonna have a tremendous upset in the country that most of us are really proud of as a country that's a melting pot.
Good. All right. I think that's fair enough. Let's get into the real bad guys, which you alluded to which are in the book. The second part of your book is dedicated to all the gotcha's and the fees. How financial management is just set up to basically get us. Also the rules. You really get into the distinction between how financial advisors are categorized. Can you explain a little bit about that, and the language patterns that you look for in the marketing, or how things are communicated. What you basically want and what you don't want?
Here's the purpose of this book. Protect you and make you win. So to protect you I gotta educate you on some of these little things. They use language patterns that you don't understand so that you give up and say, “Manage my money.” Let's talk about it. There's 310,000 financial professionals in the United States. Of those 310,000 there are 200 different names for them according to Wall Street Journal. Everything from wealth manager, wealth advisor, to financial advisor. You name it. 90% of them are brokers meaning out of 310,000, there's only 31,000 people that are known as fiduciaries.
Let me explain. A broker is a good human being, but they work for the house. They've been trained by the house. They might even own the house's products, but the house always wins. Meaning these big financial houses. These big brokerage firms. If they've got their name on a stadium, that's a clue. There's a reason they have that much profit ability. The reason is they're not mean horrible organizations once again. They're companies that are looking to do what they're designed for, which is maximize profit. The only problem is how do you maximize profit when business isn't growing that much? You gotta get more fees. How do you get more fees? Make sure the people don't know that they're in the fine print. This book gets rid of all the fine print. No fine print. You know exactly what to do. You know how to change things and how important a fee is. A lot of people will say, “Well, gosh. What's the big difference? 1%, 2%, 3%.” Oh my god. Fees matter and they will determine whether or not you're financially free or not, at some stage in your life.
I'll give you an example. Let's say you're 35 years old. Let's say you worked your ass off, you've saved 100 grand. You put it in the market. Over the last 30 years the market averaged 10.25%. But in the last 20 years it averaged 8.2. So let's take the lower number. Let's say you get 8% for 30 years. At the end of that time, if you paid 1% in fees you have $762,000. Not bad since you added no other money. 100 at a growth of 762. But if you paid 3% of fees, which is the average … You know how people go, “What do you pay in fees?” Most people don't know, and if they do they say 1%. That's called the expense ratio. There are 17 other fees in that 35-50 page document that you may not see. If you pay 3% in fees you got $432,000. Literally the person that paid 1% in fees got 60% more money. The person who had 3% in fees is gonna run out of money at 79. The person who had 1% in fees is gonna have money through 93 years old.
Fees matter. In fact, every 1% you've got to pay. Most places it's 1% or less, the best organizations, but that's the real number. That's all in. If you pay 2% or 3%, every 1% above the first 1% you pay that you're overpaying costs you a decade of income in retirement because of compounding. If you're paying 2 or 3%, you've lost 20 years of income. I could get you the same stock, the same equities out of 1% fees, and all that money would be yours instead of going in the broker's pocket. You've gotta know what you're doing. It gets a little more complex. There's brokers. There's this thing called a fiduciary. A fiduciary is like a dietician.
If you go into a meat market, you go into a butcher shop and say, “Hey, what do you got for me this weekend?” All they sell is meat. The guy doesn't look at your health. He sells what it is that his company sells. He probably believes in it. He probably eats it. He'll say, “How about the roast pork chops or roast rib?” Or whatever the it is. I don't eat meat obviously, you can tell by my description. On the other hand, if you went to a dietician they say, “Whoa, buddy. You gotta stop eating all that meat. You're gonna get cancer. You're gonna get a heart attack. Let's get some salad here. Let's trade the meat out for some fish. Here's what we're gonna do.” You're only paying them for their advice. They're not making money off the meat.
What happens when you go to a broker is they sell you what they're taught to sell you, because they make the most money on it. 10% of those 310,000 are registered invested advisors. I know it's big words. A bigger word is the F word. You should learn it. Fiduciary. What does it mean? It means a person who's a fiduciary has to put your needs ahead of their own. Your lawyer has a fiduciary law they have to do. They have to look out for your best interest. They can't charge you, make you do things that are their best interest over yours. Same thing's true with your doctor. Same thing's true with financial professionals in Australia, in England, all over the world. We're one of the few places where people aren't fiduciaries. There's been this push to make people fiduciaries in the 401K space, because it's one of the most abusive spaces. That looks like it's going to get turned over by Trump.
Here's what I found out though. These RA's … Again, I'm sorry for the language but you gotta know. Once you know the words you'll understand what they mean. These independent advisors that are not brokers, and are not selling you their products … I said to you there's only 10% of them. 31,000. I was wrong. There's a gray area on the law that I found out about, it's crazy. What happens is of those 31,000, 26,000 are dually registered. Which means they tell you, you're only paying me a fee. I'm not selling you any products. I don't make any money off of you other than my fee for my advice. I don't get a commission. Out of 31,000, 26,000 also have a broker's license. In the middle of a conversation, they switch acts and they sell you their products which are inferior, but have super high fees and will cost you a decade or two.
When I heard that I kicked everybody off my platform, and decided to partner with the number one rated firm in the United States called Creative Planning. My partner is Peter Mallouk. He's my co-author in the book. Peter's the one who taught me this. I couldn't believe it. You guys are saying you're fiduciaries and playing on the side cheating you. I kicked them off the platform, we became partners. I'm on his board now. He started out with 500 million in assets he built to. In 2008 when all hell was breaking loose his company grew to 2 billion in assets. He had no advertising. It was just because he showed people during the crash. He warned them it was coming. He said I don't know the timing, but here's what's going to happen. He told them what they're gonna do to make money out of it.
He made so much money for his clients he went to 2 billion. Now he's 23 billion in assets, and he's the number one rated guy for CNBC 2 years in a row. Number one wealth advisor for Barons 3 years in a row, which no one's done. This year Forbes put up their first and he's number one. He's my partner. If you go to work with them … If you buy this book, 100% of the profits go to feed people. If you go to work with him I get a benefit because I'm part of the firm, so you know that because I disclosed that. I'm not doing it for that reason obviously.
I think if you want to get a second opinion from the number one firm, you people should go to www.GetASecondOpinion.com. That's “get a second opinion dot com.” For free they'll evaluate a plan or evaluate what you have. If you decide to become a client they charge less than 1%. It goes all the way down to .25 in that range. 8.85 is the average. Less than a percent. You can just take it, and implement on your own if he's willing to do it. In fact, I convinced him to do what he does for billionaires and millionaires to develop a division that would do this for people for as little as $50,000. Anyone who wants to check it out, he's an option of doing it. The book will educate you what to do as well. You can also do it on your own.
Good, good. I love that. II love how you integrated and clearly the narrative here, the voice is yours. You and I have talked many times before and you've always been pretty forward that you don't like writing books. You found a guy who really was able to maintain your voice throughout and add so much value too.
Actually I wrote it. He didn't do that. I brought him in to write the chapter on 2008 and on the bear because he successfully navigated me to fortune for his clients. So I figured I didn't … I did well in 2008, but I wasn't the financial planner. He did that when he had billions of dollars. I had him write that chapter, and quite frankly I helped write it, because my clients are used to my voice. I think if you read it you could tell it's me. I like writing books about it as much as pulling my eyelashes out. I wrote those purely because a crash is coming, and if people don't protect themselves … By the way protecting yourself is not dropping out of the market, that'll screw you. Protect yourselves and diversifying so you can be in, not get lost, and when the crash happens take advantage.
Great. All right. The book's just packed with these techniques and I like the fact that you just went over the gotcha's, which is good. Peter, because that was my other question. Just having a resource. Continuing on to the end of psychology here, it's chapter 9 that you talk about real wealth. Knowing you and following you as long as I have, you know a lot of miserable billionaires. You also incorporated … I was pretty interested. You had talked about heart mass in the book as well. You talked about some of the other tactics in the playbook. You even included an email address for people to share their state in the book, which is pretty rare. There was one thing. I remember this is something that really affected Tim Farris too … Is loss, lust and never as negative drivers.
Here's what my question is. Now that you've written 2 financial books, you've interviewed the smartest financial minds alive. I'm curious as to whether or not there have been any new insights or patterns that you recognize in their process or their psychology, and what are the steps that you got to see with regards to wealth psychology with clarity. Is there something that has been an “Aha!” Something profound, that you've been noticing as you've been going down this journey in writing this book?
There's two sides to it. Thanks for asking questions. Good question. Out of the billionaire group … I asked every single one of them what would you do if you couldn't give your money to your children, but only a set of principles or a portfolio? I got the most amazing answers. The guy that affected me the most was this guy Ray Dalio, who many of you listeners might not even know who he is because he's not as famous to the general population. Again, you'd have to have a 5 billion dollar net worth or be in government to give him your money. He doesn't take money anymore. He's the most successful … He's returned more money in vouchers than anyone in history. That's how strong he is. Just genius.
When I was with him, he and the other people, I noticed 4 things they had in common. He's a macro trainer predicting what's going on with the world in a whole. There's some guys like Carl Icahn. He's going in and buying stock and trying to influence the managers. Like an activist investor. Sir John Templeton, I interviewed before he died in 2008. I interviewed him 3 times. He's one of the greatest professors in the history of the world. His whole thing was invest during maximum pessimism, when there's blood in the streets. Like the Rothschilds talked about.
Everybody was different. How do you find something that your audience could use that I could use is kind of my checklist. Even if they're all different there were 4 elements that were universal amongst them. They weren't just things they were interested in, or they tried to apply. They were obsessions. One of them is so damn simple. It's boring but it's good to know. They were all, number one, obsessed with not losing. That sounds simplistic. 90% of investors or more, probably 95, are focused on, “How much am I going to earn, how am I going to get it?” They understand that if you lose 50% in the market it takes 100% to get even.” You had 100 grand, you lost 50%. That's 50,000. Now if you grow 50% you only have 75. You got to grow 100% more. That could take you a decade. They all know they're gonna be wrong so they all develop asset allocations.
Like the example I gave you with Ray Dalio. He gave me a portfolio that's made money. The exact portfolio was never revealed in his history, I just teased him, controlled him, convinced him. He was a fan of my work. I said listen, you give away half your net worth. You told me these wealth managers don't know shit. People are getting screwed. Give me the goods. Tell me how you do this. He did. I teach all those, but you've got to have asset allocation so that you don't lose.
The second piece is … This is counterintuitive also. Most of us have been taught no risk no reward. You want big rewards take big risks. Taking big risks will guarantee you're gonna be broke financially. You just don't do that. What these guys are addicted to, what they're obsessed by, is a term called asymmetrical risk reward. What does that mean? It means they're trying to take the least amount of risk to get the biggest asymmetrical upside. I coached Paul Tudor Jones, one of the top 10 financial traders in the history of the world for now 24 years. 24 years. He's not lost money in those 24 years. There's almost no one on earth in his category that can say that or demonstrate that. He has. What's really interesting about Paul is that everything he does … If he was gonna invest a dollar he's trying to make 5 out of it. If he's wrong, he loses that dollar he can risk another dollar. Now he's risked two. If he makes 5 he's up major. He could be wrong 4 times out of 5 and still break even. That's how these guys make money.
Richard Branson … I think you've met Richard, right? Richard is a friend of mine. Richard will just take the biggest risk with his life. He does not take those risks in investing. The number one question he'll ask you in investing in business is, “how do we protect the downside?” This asymmetrical risk reward is totally him. When he was building Virgin, he's was gonna compete with British Airlines, for God's sake. There's gigantic risk there. He realized it, and he avoids risks. He negotiated for a year with Boeing because he realized that his biggest risk was if he failed the money he loses could bankrupt him. He went there and negotiated for a year until he convinced them that if he failed in the first 2 years, he could get back the plane with no loss to him or his credit. After 2 years if he failed, then he was stuck with it. That's gonna give him the running room. What did he have? No downside, all upside. That's asymmetrical risk reward.
I'll give you a fun example. Nickels. Kyle Bass who's famous for taking $30 million in 2008 of other people's money and converting it into 2 billion dollars in 2 years, during the worst economic time in history. How the hell did he do that? He never risked more than 6 cents to make a dollar. He'd bet against the real estate market, but he did it in a vehicle where he could be wrong 15 times and still make money. He wasn't wrong 15 times. When I asked him, “How do you explain asymmetrical risk reward to a child?” He goes, “You know, Tony, I asked myself that question with my son. So here's what I did. I sat around for a year and a half and asked myself how can I show my son how to get a riskless return?” I said, “A riskless return?” He said, “That's right. Anybody you talk to says that's a stupid question and it doesn't exist. But Tony, great leaders ask better questions. That's what you teach. I asked a different question and I kept asking it until I found it. It's nickels.” I said, “Nickels?” He said, “That's right. A nickel is a riskless reward. If you invest in a nickel, it's worth a nickel. It's never going to be worth above a nickel. It never goes down.”
He said, “Here's the problem. Pennies used to be made out of copper. It costs more for the copper than it did to make the pennies 2 or 3 times.” So what he did was he said, “I looked at nickels and found out their melt value is 6.8 cents. That means they're worth 34% more when you buy it. The day you buy it, it's already worth 35% more and it doesn't go down in value. It's still worth a nickel. “I said, “you can't legally melt money right now. They changed the law.” He said, “I don't need to. Those pennies that used to be full of copper are now full of tin. Do you know how much a penny that's got copper in it is worth today? 100% more. 2 cents. The minute the government wakes up, it costs them 11 cents to make a nickel. You want to know why your economy in this country is screwed up? You got a government who spend 11 cents to make 5. That's the way they think. They're gonna wake up just like they did with pennies, and when they do they'll take the nickel out of it and put tin or something else in it. All the original ones will be worth 100-150% more.”
He goes, “If I could push a button,” if he called the Fed and had them send him all the nickels he could buy, he'd buy 20 million nickels. Then he said to me, “if I could push a button to convert all my assets into nickels tomorrow I'd do it in a heartbeat.”
Last two are tax efficiency. Most people listen to their brokers, or someone tells them how much they made. What you make is after fees and after taxes. Taxes are the biggest thing that will affect you. The biggest expense in your life. We teach you how to do that in the book. That makes a giant difference of whether you get financially independent or not. Finally you've got to diversify. Everybody knows that. You've got to diversify across assets, across markets, across timelines. Again, those four are the ultimate checklist.
To answer the other question, I've met 50 billionaires. More than that now. I would not say the majority are happy. Money doesn't make you happy. Money makes you more of what you are. If you're an angry person you'll have more to be angry with. If you're a giving, loving person you'll have more to be loving and giving with. It does not change people. That is totally absurd. It magnifies. What you really have to do is realize money's not going to do it. It's great to have money and resources. Kind of like portable power. You can help friends, family, people you don't even know with it.
You've got to understand that the human brain, again it's not designed to make you happy. It's looking for what's wrong. It's trying to make you survive. If you let it, you'll always be stressed no matter how much money you have because it will worry, “What do people think of me? Do I have enough money? Will the IRS come?” That's the nature of human beings. In the book I do a whole chapter on the tools I've learned to break those patterns. You get happier and happier, so that your survival brain isn't rutting you anymore. If you've got a billion dollars and you let that survival brain run you … I know billionaires that are stressed every day. I know, man. I had a conversation with them just about 2 weeks ago. I said, “Look. You're a dear friend, I've coached you for years. What is this shit of screaming and fighting with your wife and kids for spending money? The multi billionaire. If you spent a million dollars a day for your entire life, you couldn't even come close to spending a portion of your wealth. This makes them happy. What are you doing?” It's because he's still living in survival, as if he was still back in the place he was when he started his career.
Being free. Experiencing joy, happiness, love. Living in a beautiful state. That's rich. That's wealth. If you do that and you make money, because you know what to do what the book teaches you, now you've got the world by the tail.
Is there any final question you want to ask me, buddy?
I have one other one. I was going to ask you about integrating philanthropy in the business, because you're giving away the money for the book.
Let me just touch on that for one minute then. I have found that the beautiful thing about human beings, the reason I'm proud to be a human, is we'll do more for others that we care for than we'll ever do for ourselves. You only work so hard to take care of yourself. It's not that hard. Food, basic fundamentals are there, you want some goals. I don't care how much money you make. I don't care how many people like you. I don't care what's happened in your life. If you personally don't feel like you're growing, you're dying inside. If you don't feel like you're giving something beyond yourself, we feel selfish eventually. Even selfish people eventually feel selfish and then feel guilty or sad or frustrated. They get mad at themselves. Then often they externalize it to other people. The truth is we're made to grow, and we're made to give. If you're not growing you're dying. Financially … If your relationships not growing it's dying, if you're not become stronger physically and healthy, you're starting to break down and die. That's true of every aspect of life. The reason I believe we grow, the reason growing makes us all so happy, like progress equals happiness, is because when we make progress we grow. We have something legitimate to give.
Most of us, when something great happens in your life, what's the first thing you want to do? Share with somebody that you love because it magnifies it. The purpose of a relationship is the magnification of human emotion. If you want to magnify life, and you want to magnify them in a good way. The really simple thing is learning to take that control of your mind. To have the riches that you want today while you're building financial wealth as well. I have more excitement about feeding … These are my goals now in my life. I'm fortunately and currently, I'm set. Financially wealthy.
What's really cool is when I set this goal I've been feeding people since I was 17. My family fed me when I was 11. I never forgot. I fed 2 families before, then a million, then 2 million. I got about to where I was feeding 2 million people a year through my foundation, and then I matched it. I provided 2 million myself to my wife and I. That's four million a year. Then I write this book, the first book here, Money Master the Game, and I end up meeting all these billionaires. Self-made billionaires. I'm thinking to myself, “While they're being a billionaire you've got congress cutting food stamps to the poorest Americans.” And they cut it by 6.9 billion dollars. Which means anybody that needs help who was getting it has to give up a week of food for their family every month, with no support unless the private sector jumps in. I've fed 42 million people in my life, so I thought, “What if I fed 50 million in a year?” I got excited. Then it was 100 million. Now it's 200 million in the last two years. I'm gonna feed a billion in the next 8 years overall.
I'm also providing water for 250,000 people a day in India, because the biggest killer of children there is waterborne diseases. I'm part of the X Drives, we're providing 1 in 7 humans is illiterate. 215 million children are illiterate. We'll never have enough teachers. I teamed up with Elon Musk, and put a 15 million dollar prize together between us, and a couple other people. We have 300 teams competing to teach someone how to rewrite the arithmetic on their own, with no teacher for an iPad. The winning team gets the 15 million, but then the contest is open source and everybody in the world can do it. Nothing excites me more than this.
I was just … I won't say where because it was private, but I just went to a really wealthy part of the world 2 weeks ago. I'm part of the underground railroad. You got a former CIA, FBI, and special forces guys that … There's more slavery in the world today than anytime in history. Part of it is population. Sexual slavery … Any form of slavery drives me crazy. I provided a significant amount of money, time, and energy, but then I also got out with these guys. We just went to a particular island nation and rescued 36 girls aged 9 to 13. They've been in sexual slavery for 5 years or more, returned that next day. About a third of them to their family. Some of their families sold them, if you can imagine. Helping integrate them all. It was the biggest bust in history. We got 13 of the biggest perpetrators in the country knocked out. This stuff excites me much more than, “Can I get another freaking car or boat,” you know what I mean? Come on.
Those things are beautiful things. Even when you get them they're great until they get a scratch. To change a life. To connect with somebody. To do anything. It's so easy. A small amount of money can make a gigantic difference in this world. Anyone listening. If you get the book I'm gonna feed 50 families from each book. If you want to join me, anyone who wants to get a bit bold, I will match any amount you give from $10 to $5 million I'll match. Anybody listening. All you've got to do is go to pediamerica.org and go to the 100 million more, or Tony Robbins. If you donate there I'll match your donation. You can get started if you want right away.
Awesome. This is great Tony. I know you've got to head out, but thank you once again. It was great to have a little bit of time to catch up and have a little chat again. Let's connect again soon, all right?
All right, brother. I hope I see you in New York. Just reach out to my team. Of course, you and your lady. Anybody you want to bring as your guest. You're family to me.
Thanks a lot. I really appreciate it my friend. Ill talk to you soon, okay?
All right brother. Take care of yourself. See you soon.
You got it. Bye bye.
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There you go – I hope you enjoyed the interview as much as I did doing it.
The best way you can help yourself and help Tony reach his goal of providing 1 billion meals is to head to www.Unshakeable.com to get his book. Once you order, you can get the “Personal Coaching Program” and “Ultimate Edge” program valued at $299 for free!
And no matter what, we’re giving away two tickets to Tony’s upcoming “Unleash The Power Within” (or UPW) event. No Purchase Necessary! I’m going to randomly pick someone at the end of this month to receive them. All you have to do to qualify is like, comments and SHARE a link to this post – do that right now!
So to wrap this up, I’ll tell you the rest of the story about how I met Tony Robbins and wound up working with him.