MONEY Master the Game – Tony Robbins

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MONEY Master the Game Book Cover MONEY Master the Game
Tony Robbins
Simon and Schuster
November 18, 2014

Good book with some basic finance tips and methods to follow. If you are a Tony Robbins fan I'm sure it will catch you more than others.

4 Stars.

If you want to read my notes from the book, click Continue Reading --->

Set aside 15% of any paycheck I get! No matter what for compounding

Need to open a savings account and automatically transfer a portion of each paycheck I ger

Index investing is the best. S&P500 0.14% fee

Fees on management portfolio should be 1.25% or less

For investment advice make sure to use a fiduciary Registered investment advisor RIA

Stronghold financial. Com

Structure note – lending money to the bank (make sure to do through a fiduciary so the note won’t have fees)

Market linked CDs

Fixed indexed annuities

$10M will make me free

Need to build a year of emergency savings account

Asset allocation is everything – You want to diversify between your saving bucket and risk/growth bucket. You want to diversify across asset classes/market/time

Dollar cost averaging – Setup automated investment each month into your diversity portfolio regardless of the timing (market downfall etc) proven method to build wealth (Benjamin Graham) Vanguard allows you to do it. Setting up an account with stronghold

Have a dream bucket that have you emotional juice and excitement so you can experience the gifts of your investments in the short term and mid term instead of just some day in the future

Rebalancing your portfolio in regular intervals – make sure your asset allocation is at the right ratio. Let’s say you set that your risk/growth bucket should be 60% of your portfolio and 40% in your security bucket. Couple months have past and now you risk/growth bucket is 75% of your portfolio and only 25% is your security bucket, you need to rebalance. Don’t let emotion take place. In this case either divert your monthly contribution to the security bucket until you get back to 60%/40% ratio or sell some of your growth/risk investments that are booming and reinvest them in your security bucket. Should do it once a year. Stronghold or any other fiduciary can automatically do it for you so you don’t need to think about it.

Tax loss harvesting – reduce your taxes and they increase your tax return

All weather strategy

50/50 bonds/stocks portfolio is a misconception. Stocks are 3X more risky than bonds, meaning you have 95/5 portfolio

When you want to build a diverse portfolio you need to do it in a risk/reward way and not just amount of dollars in each bucket

There’s a difference between correlation and causation. The fact that something sometimes correlate with another at the same time (stocks go up and bonds go down) doesn’t necessarily make it that one is caused by another

Four seasons investment Theory –

Home prices go up during inflation. As well as stocks.

Bonds are going up when there’s deflation

The 4 economic seasons are:

Higher than expected inflation – rising prices
Lower than expected inflation – deflation
Higher than expected economic growth
Lower than expected economic growth
I manage 4 portfolios, each with equal risk in them so I won’t have an exposure to any season

What investments work best in each weather:

All Season Portfolio –

30% in stocks (S&P 500 or other indexes for further diversification in this basket), long term government bonds, 15% in intermediate term (7-10 year treasuries) 40% in long term bonds (20-25 year terms) 7.5% in gold, 7.5% in commodities.
Last – You need to do a rebalancing of the portfolio at least once a year so if you see one of the buckets is going well, you need to sell a portion and reallocate it back to the portfolio for balancing (recommended to do it by fiduciary).

*The portfolio is not tax affiant sometimes, you can also use tax annuity (offered by vanguard)

Freedom – Creating your lifetime income plan

Income insurance is one of the most important things ever.

Americans should convert at least half of their retirement into an annuity – US treasury department

There are 2 main categories of annuities:

Immediate Annuities – Best use by people at retired age or beyond
Deferred Annuities – Give the insurance company money (either one large sum, or in small sums over the years) and instead of receiving an immediate income, your money is reinvested a tax deferred environment so you can start getting paid when you choose to begin.
3 Types of Deferred Annuities

Fixed Annuity – This is when you get a fixed rate of return every year, regardless of any independent ups or downs in the stock market. Much like you would receive from a CD or Bonds but the rates are different.
Index Annuity – Your rate of return is tied to how the stock market does, but you get a percentage of the upside of the market, not all, with no downside and no possibility of loss.
Hybrid Index Annuity – You get the benefits of the index annuity with the addition of a lifetime income rider. This lifetime feature lets you turn on a feature to get paycheck for life
How safe are annuities? It only make sense if the rating of the insurance company is rated very high

Variable annuities are toxic and very bad

The Ultimate Income Solution

Fixed Indexed Annuity – Your deposits remains entirely in your control, you are not giving up access to your cash, it offers the potential for significantly higher annual returns than other safe solutions such as Bonds and CDs. It provides 100% guarantee of your principle, you can’t lose your money. The gross is tax deferred providing maximum compounded growth for the expansion of your freedom fund. It provides income insurance or a guaranteed income for life when you select optional income rider.

How does it work? The insurance company park your money in its cash reserve, the remainder is used to buy options and pay for expenses.

The thing is it only open for people over the age of 50 and with a significant income level. Need to follow

Bank and large corporations are the biggest buyers of life insurance – Why? A place to park their cash in an IRS sanction vehicle that allows them to grow their investments tax free

Living revokable trust

The common rules of the 0.001%

Don’t lose
Risk a little to make a lot – Asymmetric risk/reward
Anticipate and diversify
You’re never done learning/growing/earning/giving
The Yale model of endowment investing

3 rules:

Asset allocation – what assets are you going to hold in your portfolio and in what portion
Market timing – Are you going to try to bet on whether one asset class is going to perform better in the short run relative to the other asset classes you hold (bonds/stocks/real estate)
Security selection – How are you going to structure your bond portfolio/ stock portfolio
Buy and hold with diversified approach helps any investor to get returns

Warren Buffet – The best way to go is indexing, invest in great American business without the fees mutual funds have and hang on to them and you will win on the long term

Paul Todder Johns – Defense is 10 times more important than offense

2 tips

You always want to be with whatever the predominant trend is

The matrix is the 200 days moving average of closing prices. I’ve seen stocks and commodities go to 0. The whole trick in investing is how do I keep from losing everything

. If you use the 200 days moving average rule, you get out. You play defense and you get out.

5-1 rule Asymmetric risk/reward. risk $1 to make $5

Ray Dalio

T boon

Natural gas is the place to invest

Kyle Bass

Right now the biggest opportunities in the world are in Japan, better than subprime was. The timing is less certain but the rewards are bigger. It’s the worlds stress point an it’s the cheapest it’s ever been right now, meaning to buy a kind of insurance policy

2 things are need to take into account in the options pricing model are

The risk free rate
The volatility of the underlying asset
Mark Faber

The best time to buy is when there’s blood on the streets.

It’s not important what you buy, it’s the price for which you pay for something.

You have to be careful of buying things at a high price , because then they drop and you’re discouraged.

Be cool and have money when your neighbors are depressed

Charles Schwab

3 decisions that determine our lives

What are you going to focus on
Where focus goes energy flows
What you focus on and your pattern of focus shapes your whole life

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