Money Master The Game : 7 Simple Steps To Financial Freedom - Tony Robbins

Money Master The Game : 7 Simple Steps To Financial Freedom

The value of Money Master the Game Strategy

Most people dream of being financially secure, but have no idea where to begin . Even when a plan is put into place, they struggle to stick to it and end up back where they started, or possibly even worse. Money Master knocks all of that out of the water by explaining in clear terms how you can create a plan to give you cash, with minimal effort.

Money Master doesn’t focus completely on how to make money and splash the cash throughout your days, but talks about creating the financial picture you need to have the life that you’ve always wanted.

For anyone who has thought about investing as passive income in the past but has been confused with the whole subject, Money Master is a clear and inspiring book to create the financial freedom of your dreams.

What is money to you?

We all need money in order to survive, whether we want to admit it or not. The problem? Many people struggle to talk about it, feeling awkward or uncomfortable when cash flow enters into the conversion.

The bottom line is that money is required for life, but it’s not the most important element. However, money is power and if you don’t control it, it will control you.

Tony Robbins highlights the importance of having the right attitude toward money, correctly mentioning that money has the power to fund your goals and dreams, but it can also work the other way, and start a conflict or even a war. Money needs to be controlled carefully, and its power harnessed.

“Money is a good servant, but a bad master” ~ Sir Francis Bacon

Money Master covers 7 steps toward understanding the best way to win the game of money, but first,​ you need to work out what money means to you and what you really need in order to be financially comfortable. A huge 77% of Americans report having money worries, but conversely, only 40% actually have an investment plan or budget in place. By switching your attention toward investments and learning how to do it in the right way, you can create a nest-egg that will continue to look after you into retirement.

Robbins learned a lot from investor and billionaire Ray Dalio, informing many of the secrets you find in the book. Dalio says that by embracing your weaknesses you have the power of knowledge and you can use that to learn. The truth is that even the most successful financial minds aren’t simply lucky, they’re simply doing things in the right way. Knowledge is power!

3 Steps toward subject mastery

The goal of Money Master is to help you put together a plan which gives you an income for the rest of your days. It’s more important than ever before to think about the long-term, because our expected life spans are increasing all the time. Within married couples, there is now a 50% chance that one partner will live to the age of 92. When you live longer, you need to generate more cash to cover the years!

Of course, you don’t want to be working when you’re 92, and the key to ensuring you have that cash is taking steps now, and creating a passive income. This means you’re creating a method of income which runs itself, or with very minimal input from you. Investment is the ideal way to create a passive income method for yourself.

However, in order to understand and master investments, or any subject at all, there are three things to bear in mind. These are the three levels which allow you to master any subject at all, investments included:

Really understanding the subject or idea, also known as cognitive understanding.
• Having an emotional reaction or pull towards the subject, known as emotional mastery.
• Doing something about it, known as physical mastery

You need all three to make it happen, but repetition is the key. By repeating your actions over and over, you’ll learn more and you’ll increase your chances of success

The First Step is most important

The single most important thing you need to do on your road to financial success is to actually take the first step!

The first thing to do is to decide upon a small amount of money you can put aside. From your regular paycheck, identify an amount and place it in a savings account, having it electronically transferred so you don’t actually handle it yourself. Robbins calls this money your Freedom Fund, the cash which is going to lead towards investment success.

He highlights the story of Theodore Johnson, who worked for UPS in 1924. He might not have had the most high paying job, but he still managed to put 20% of his salary into a savings account and leave it there. He then invested in company stock and had made more than $70 million by the time he reached 90 years of age!

The aim is that your smart financial decisions will lead to something called compound interest. As your investments grow, you will live from the interest that comes your way without actually having to work. Of course, you might choose to still work, but that’s your decision! The small amount of cash you choose to save will compound into a huge amount over time.

Belief is vital if you want to succeed

If you want your investment and savings plan to actually work, if you want to reach the pinnacle of your own financial freedom, you need to actually believe it’s going to work. Without belief, you might as well pack up and forget about it at the start.

Robbins mentions Curt Schilling, the baseball pitcher who earned a huge $100 million throughout his illustrious career. Afterwards, he invested all his savings into a startup business which never got off the ground. He lost everything and is hugely in debt as a result. Afterward, he admitted that he never really believed it was going to work.

If you want to master the game of money, you need to stop thinking about going to work for cash, and you need to start thinking about a world where the ​money actually works in your favor, in the way you want it to. Mindset is everything and belief will get you far, helping you to make better decisions in your investing efforts.

Don't jump before the rules are clear

You might think you know about investing, you might have read a few books and learned a little knowledge, but you don’t know the ins and outs enough to make a move just yet. Make sure you know the rules, the little nuances that could make or break your investment plan. Learn the potential pitfalls and where the real danger lies.

“You have to learn the rules of the game, and then you have to play better than anyone else” ~ Albert Einstein

Investing is packed with potential landmines, as Robbins calls them, to the point where they could randomly explode. Your financial future will go up in smoke with them. If you don’t educate yourself on the risks, your money dreams will never come to fruition. In this case, ignorance is certainly not bliss.

The Secret to succeed? Avoiding the scams.

The biggest pitfall is going with an investment because it sounds wonderful, even too good to be true. If something sounds too good to be true, that’s because it normally is. Brokers are running a business, trying to make a profit to line their own financial futures. They’re not going to give you something for nothing. A broker will earn cash on your investment whether you win or lose.

Being tempted into handing over a huge amount of your funds toward an investment is a huge no – no. The problem is, investments are easier than ever before, thanks to the Internet. You can easily sit on your sofa at home in your pajamas and invest whatever you want, but it’s never wise to simply throw cash at an investment which promises the world. It will probably return very little.

Robbins is friends with Steve Wynn, a man who has made Las Vegas the gambling capital of the universe. Despite the fact that a high-roller could easily walk into one of his casinos and wipe them out, Wynn has it all covered. In this case, the casino, or the ‘house’, is the one that is really in control. The same goes for certain brokers and other scams — it looks great, but you don’t know the whole story. Proceed with caution.

Critical Mass is your aim

The aim of achieving positive financial freedom comes down to something called critical mass. This can be likened to a mountain, but you would never attempt to climb Kilimanjaro or one of the other monster mountains without first knowing what to expect, would you? You would look into the weather you might expect along the way and prepare accordingly, you would buy the right equipment, and ensure that you have everything you need. Investments are the same.

The aim is that you will go through three phases: the accumulation phase, the “view from the top,” and the de-acumulation phase.

The accumulation phase is when you’re putting a little cash aside from your salary every month, accumulating enough to invest. You’re then investing smartly and wisely in the right areas, listening to advice from those who you can trust. After that, you hit a point which allows you to plateau. This is the point where you can chill out a little, enjoy the view, and spend time with those you love. Hopefully, this point will last for many years, but a wrong move during the accumulation phase could scupper your hopes of reaching they point, or drastically reduce the time you have to enjoy the sunset view.

You then inevitably have a de–accumulation phase. This is likely to occur after you finish working and you need to spend some of the cash you’ve amassed. This isn’t something to worry about, provided you have made smart decisions in the first phase, and enjoyed your plateau.

What do you really need?

How much do you think you need to be totally financially secure and free? Be realistic. You might be tempted to come up with a crazy number in the millions, but not every investment is going to hit the dizzy heights of major success. In order to be happy with your lot and enjoy the spoils, you need to come up with a number that​ suits you and your needs, and then you need to make it do-able.

Robbins often talks about this during his TED talks and seminars, asking the audience how much they think they need to fund their dreams. Typically, people stand up and give wild amounts, but most don’t actually know. It takes time and a little research to work out how much you’re actually going to need to be secure, paying off any debts you have and paying for things like your house and car. Work it out and come up with a number that​ suits you.

When you look at that number, it might seem wildly unachievable, but by making shrewd investments and working with the compound interest you receive, that number will see much more realistic. However, do make sure that the number you come up with is personalized to you and your situation, and that you’re not placing too much importance on significance. By doing this, you’re simply competing for attention or comparing yourself to others. This is your journey, not theirs. Fulfillment​ comes from personalizing your dreams and aims.

The bottom line is that you cannot reach your overall financial goals if you have no idea how much you’re going to need to reach the plateau point where you can enjoy the view. From there, you work slowly and methodically to make definite progress.

"You can have it all. Just not all at once” ~ Oprah Winfrey

Diversifying your investment protects you from harm

You’ve no doubt heard the saying “don’t put all your eggs in one basket”, and investments are exactly the same. Markets change and plummet, things happen within the world which have a huge effect on stocks and shares. You cannot always predict what is going to happen to your investments, even the most experienced brokers in Wall Street can’t 100% of the time!

With that in mind, diversifying your investments helps to protect you from those surprise downturns in the market. This also comes down to something called asset allocation.

With hard work, anyone can earn a lot of money, but you stay wealthy by understanding asset allocation. This means where you place your money, and how you arrange it. By placing all your cash in one investment, you have a huge amount of risk which could turn around to bite you in a very unpleasant way.

Robbins asked David Swenson, an expert investor, what the three most important elements are for successful investing. He said:

• Choosing your investments wisely, e.g. security selection;
• Making short time investments based on the way the market is going, e.g. timing;
• Asset allocation as a way to diversify your investments over the long term. He mentioned this as the single most important of the three.

Simplified down, asset allocations means taking your Freedom Fund and dividing it up amongst different investments. These could be bonds, stocks, real estate, or commodities, etc. The way you divide it up depends upon your overall goals and how much tolerance you have to risk, but diversity is key.

By doing this, you might lose on one score, but you’ll win another every single time.

The life-long plan which leads to long-term financial security

To give you the comfort blanket of a steady income for the rest of your days, you need to invest in a way which limits the amount of losses you might suffer (reduce risk) but also increase the gains you will receive.

This can be difficult because nobody knows what is going to happen in life. We don’t have a crystal ball! The things which happen to us throughout our lives change us and shape the way we see the world and the way we make decisions. For instance, if you were born during the Great Depression, you will have lived through a hard time financially and economically. As a result, your spending and investment decisions are likely to be much more hard – thought and care. However, if you’re a millennial, you were born during at the ​time of affluence, and that means you might be slightly less careful or shrewd with your investments.

In order to create a plan which will cover most eventualities, and help you to create an income for your later years, Robbins conversed again with Ray Dalio. His suggestion was a portfolio of investments which minimizes risk and increases the potential for gain.

• 30% of your investments should go into stocks. The low number is because they are considered to have a higher amount of investment risk, compared to bonds;
• 15% of your investments should go into medium term government bonds;
• 40% of your investments should go into long term government bonds. By doing this, you’re balancing out the potential stock risk and volatility within the market;
• 7.5% of your investments should go into gold;
• 7.5% of your investments should go into commodities.

This is a model which works! You would then balance things out by watching performance. When one part of your plan works well, you would sell a little of it on and then put more investment back in, to take it back up to the percentage mentioned above. Ideally, you should do this every year, almost like an investment review.

Take inspiration and advice from professionals

You can find advice on investment everywhere you choose to look. You only have to log on to the Internet and do a Google search to find all manner of sites which promise to give you the investment secrets that will take you towards financial gains. However, how many of them are real? How many have success to back them up? Robbins suggests that you should look towards the professionals for advice, and take inspiration from their struggles. This will inspire you to make sound decisions, and not fall foul of the scams mentioned earlier.

By doing that, you’ll be able to reach your financial goals and enjoy what you earn. That means you can share it with your friends and family if you choose to, spend time with those you love, and not have to worry about working jobs when you’re past the regular age of retirement. Financial freedom literally means freedom, and peace of mind

Conclusion

Money Master covers a huge amount of ground and gives fantastic examples of investment success, balanced out with a few examples of failure, to show you what not to do.

The bottom line is that we’re living for longer and we don’t have the same pension benefits to fall back on as we might have had a few years ago. This means we need to focus on ways to line our nests for our later years, giving us the ultimate in financial freedom, both now and later in life. Investments are a fantastic way to do that, but you need to make the right moves at the right time, and believe in your decisions wholeheartedly. By doing that, you can reach your financial goals and enjoy the fruits of your labor.

Sit down and work out the amount you really need to become financially secure

Work out a percentage you can afford to save from your monthly salary

Understand what money is to you. Is it a way to afford all the things you want? Or, is it a feeling of being secure and safe?