Money – Master the Game

Erik Book Review, Thoughts of a Mastermind, Wealth Creation 2 Comments

When I was young, I thought that money was the most important thing in life; now that I am old, I know that it is. – Oscar Wilde

Money – Master the Game, by Tony Robbins is a how-do guide on how to achieve financial freedom. I read this book as a suggestion from a friend and was certainly not disappointed in spending a few days getting through this book. Many times when I go to read a book, I am trying to learn different concepts and ideas to help me improve in my life. Money is a 600 page book filled with good information on investing, saving, and life. That being said, there were some drawbacks to the book, which I will outline later in the post.

I am drawn to books on financial freedom because I’m interested in managing my money appropriately. I plan to read more books like this in the future.

As you can see on the left, Money is about learning about how we as investors can become financially free. Robbins has been a life coach for many years and has wrote this book for people who want to improve their financial situation. Coming from a relatively poor family, he has been able to build a strong following as a life coach and has influenced many people. I’m interested in reading more of his material after reading Money.

Money is broken into 7 sections:

  1. The first section is essentially 80 pages getting you motivated to improve your financial well-being. By saying “yes” to pursuing financial freedom, you are setting yourself up to become the best person you can be.
  2. The second section talks about becoming an insider to the world of mutual funds and finance. Robbins talks about the 9 myths of the finance industry; many of these myths have been talked about for years. A summary of the myths is: mutual funds and actively managed funds do not beating the market despite charging high fees. In addition to the funds charging large fees for under-performance, target funds are not much better.
  3. Section three helps you determine your “number”. How much money do you need to retire comfortably? How much do you need to retire and have no worries? How can you reach retirement faster? Robbins discusses tax efficiency, index funds, and decreasing spending in this section as well.
  4. Section four talks about different asset classes and defines the Security Bucket, the Risk Bucket, and the Dream bucket that should be a part of every person’s asset allocation. The security bucket is made up of cash, cash equivalents, bonds, your house, pension, annuities, and a few other things. the risk bucket is made up of equities, options, commodities, foreign currencies, and real estate. The dream bucket is whatever is left for pursuing your dreams! He discusses how important asset allocation is and how true diversification is the only free lunch.
  5. In the fifth section, Robbins continues to discuss asset allocation. He interviewed Ray Dalio (CIO and Chairman of Bridgewater Associates) and David Swensen (CIO at Yale University) to discuss their optimal asset allocation. Here, Robbins provides you specifics into creating a strategy which has performed well in the recent past. Ray Dalio believes a near-optimal strategy is to have even risk across the following categories: inflation, deflation, rising economic growth, and declining economic growth. His target asset allocation would look something like this: 7.5% gold, 7.5% commodities, 30% stocks, 40% long-term bonds, 15% short-medium term bonds. David Swenson, on the other hand, has a slightly different view: 20% US Equities, 20% Foreign Equities, 20% REIT exposure, 15% Long-term bonds, 15% TIPS, 10% Emerging Markets. I believe both of these asset allocations could be good and I’m doing more research into what would be best for me.
  6. The sixth section is a compilation of interviews with titans of the investing world. These interviewees include Charles Schwab, Carl Icahn, David Swensen (CIO at Yale University), Ray Dalio (CIO and Chairman of Bridgewater Associates), Mary Callahan Erdoes (CEO of J.P. Morgan Asset Management), T. Boone Pickens (Energy Investor), and a few others. These interviews are beneficial in they provide us additional perspective on the financial markets.
  7. The seventh and final section talks about the future and how once on the path to financial freedom, you will be a much improved person. Robbins emphasizes showing gratitude and giving back to charity once you achieve financial freedom. This is best captured in the quote by Winston Churchill, “We make a living by what we get. We make a life by what we give.”

Money is fairly comprehensive in the concepts and material it covers. It covers topics from investing in index funds to reduce investment costs and fees, dollar cost averaging and buying and holding, saving more as you get raises, etc. It was very beneficial to me in that I was able to learn about investing in gold, annuities, or different commodities. One downside is, the book did not go into detail on these subjects.

One big takeaway I had from Money was to switch my 401(k) to a Roth 401(k) from traditional. With a traditional 401(k), you don’t pay taxes now, but will pay tax on any withdrawals, (effectively paying tax on any gains in the future). With a Roth 401(k), you pay taxes on the amount now, but in the future, your withdrawals are tax-free. Robbins argues that in the future, taxes will most likely be higher than lower (look at the world’s debt!)

Some criticisms I have of Money are for how long the book is, it could be shortened. There were multiple chapters that seemed to go on and on about things we had already learned earlier in the book. “Repetition is the mother of skill”, but at times it was a little excessive. In addition to repeating himself throughout the book, he constantly is plugging in sales pitches for his companies and friends. I get it, he is a successful businessman and entrepreneur and wants to advertise his great products. However, at times, it seemed that was his intention. I could be wrong.

Another criticism is many of the products that Robbins talks about can only be accessed by the rich. When a person reaches retirement, hopefully they will be rich; however, during the accumulation phase of life, you won’t be able to access a lot of the different investment vehicles he discusses.

Here are some meaningful quotes and passages from Money:

  • Realize how lucky you are and all the wealth you possess in love, opportunities, health, friends and family. Don’t get rich, start rich.
  • You can be young without money, but you can’t be old without it – Tennessee Williams
  • The man on top of the mountain didn’t fall there – Vince Lombardi
  • Money is better than poverty, if only for financial reasons – Woody Allen
  • Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. – William A. Ward
  • Remember the golden rule: he who has the gold makes the rules – Unknown
  • Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves. – Peter Lynch
  • When I was young, I thought that money was the most important thing in life; now that I am old, I know that it is. – Oscar Wilde
  • We make a living by what we get. We make a life by what we give. – Winston Churchill
  • Being the richest man in the cemetery doesn’t matter to me. Going to bed at night saying we’ve done something wonderful, that’s what matters to me – Steve Jobs

All in all, Money is a decent book on the topic of financial freedom. I would recommend Money for people who are looking for to improve themselves and get motivated to improve financially; . That being said, Money lacked substance and stayed at the surface on a good amount of the content covered. It did open my eyes to thinking about investing in other products, such as precious metals, annuities, etc., but the book did not go into enough detail on these products. I’m still curious on these other investment vehicles, but will have to do more research. There are definitely better books out there for details to achieve financial freedom.

Have you read any material of Tony Robbins? What books on financial freedom would you suggest I read? Which have been beneficial and influential to you?

Erik

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Comments 2

  1. Hi Erik,

    I’ve not read the book but there were a lot of comments about it on the Bogleheads forum that I read. Tony joined a wealth management company, Creative Planning, as chief of investor psychology. So there’s definitely some self-interest in the book. But at lot of the material is well-intentioned at the same time.

    I’m not personally interested in the all-weather portfolio. I believe a simple three-fund portfolio is good enough and much simpler.

    A Roth IRA or Roth 401k is definitely a good move. Its main problem is the limited size since you can only put $5,500 a year in it. Typical advice is to contribute enough to a 401K to get employer matching, then max out the Roth, then go back and max out the 401K.

    Thanks for posting your review.

    Best wishes,
    -DL

    1. Post
      Author

      Hey Dividend Life!

      The “all-weather” portfolio is interesting, however, it seems to apply more to the very rich. 7.5% into gold for me would be a couple thousand dollars, which probably wouldn’t be worth the risk.

      Thank you for your inputs on Roth vs. traditional. Currently, I’m getting the employee match in my 401k, because I’m saving up an emergency fund/real estate fund.

      Have a good day DL,
      Erik

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