MONEY Master the Game: 7 Simple Steps to Financial Freedom (6 page)

I asked Ray, “If you’re telling people they can’t compete in this game, should they be thinking twice about letting someone else play
for
them? What about the brokers and mutual fund managers who say they can get you better returns?”

“You think you’re going to a doctor, but they’re not doctors,” he told me. We’re trained to throw our total faith into doctors and do whatever they tell us without thinking, hoping they have all the answers. But Ray Dalio says that typical money managers are not going to help you win because they don’t have the skills or resources to play in the big game, either. “If they did, you wouldn’t have access to them.

“The Olympics is easy compared with what we do,” Ray continued. “This is more competitive. You can go to your broker-dealer, and you think you have to say, ‘Is that a smart guy?’ He might be smart. He might care about you.
But you’ve got to ask, ‘How many gold medals has he won?’
You have to be very, very careful, because there are so many people who’d give you advice, but they have to be good enough to be able to take it away from the best in the game.”

So what’s the answer?

“Instead of trying to compete, you’ve gotta learn
there is a passive way to win.
There’s a way to
not
put all your eggs in one basket. It’s a system to
protect yourself against all downsides,
because the best investors know they’re going to be wrong, no matter how smart they are.”

Wait a second! Ray Dalio, who gets a compounded return of 21%, can still be wrong?

“That’s right, Tony, I’m gonna be wrong,” he said. “We’re all gonna be wrong. So we gotta set up a system that protects us from that.”

So, at the end of nearly three hours together, it was time for the big question: “Ray, what is that system?” And Ray said to me, “Tony, the last time I took money, you had to have a five-billion-dollar net worth to get access to my knowledge and the minimum investment was one hundred million. It’s really complex, and it changes a lot.”

I said, “C’mon, Ray. You just told me that nobody new can get access to you anyway. I know how much you care about people. If you couldn’t pass on your money to your children, and you could pass on only a set of principles or a portfolio—a system that will allow them to make money in good times and bad like you have—tell me what that would look like for the average investor?”

We went back and forth a bit, and in the end, guess what? He walked me through the sample ideal portfolio, the exact investment mix that would
help you maximize returns with the least amount of downside volatility in any market.

What’s a portfolio? If you’re not familiar with the term, it’s just a collection of diverse investments that you put together to try to maximize your financial returns. Ray revealed a simple system of what to invest in and in what percentages and amounts. And when we looked back in history, we found that by using his strategy, you would have made money 85% of the time over the last 30 years (1984 through 2013)! That’s only four losing years in the last 30 years (1984 through 2013)—with a maximum loss of 3.93% in a year (and an average negative year of just 1.9%). And one of those four down years was just 0.03%, which most would chalk up to a breakeven. In 2008 you would have been down just 3.93% when the rest of the market lost 51% (from peak to trough)—all by just doing what Ray has shared with us. The plan he shared here has averaged a return of just under 10% per year (net of fees), and it’s an investment plan that you can easily set up for yourself! And it’s only
one
of the systems from the world’s greatest investors that you’ll learn when you get to section 6, “Invest Like the .001%: The Billionaire’s Playbook.”

Now, I know you want to jump ahead right now and look up the portfolio, but I want to remind you, there are 7 Simple Steps you have to follow to make this work. If you haven’t figured out where you’re going to get the money to invest, you haven’t figured out what your goals are, and you don’t know what the rules of the game are, then access to the best portfolio in the world will be worthless. So stay with me, and let’s stay in sequence. There’s a method to my madness!

How valuable is that information from Ray Dalio? If others have to have $5 billion to get access, and it cost you only the price of this book, then it’s not a bad return on investment!

As exciting as it was to learn his investment system, what I found most interesting about Ray is how he looks at the world. He sees it as a jungle, and his life as a constant, exhilarating battle.

“The way I look at life, Tony, we all have something we want, something that represents a greater quality of life. But to get there, you have to go through a jungle filled with challenge. If you pass through it, you get to the life you desire. It’s like I’m on one side of the jungle,” he told me. “And you
could have a terrific job, a terrific life if you can cross that jungle. But there are all of these dangerous things and they can all kill you. So, do you stay on one side and have a safe life, or do you go into the jungle? How do you approach that problem?”

Ray goes into the jungle with very smart and trusted friends by his side, always asking, “
What don’t I know
?” “This is the key thing,” he said.
“What has been very successful for me through my whole life is to not be arrogant about knowing, but to embrace the fact that I have weaknesses; that I don’t know a lot about this, that, and the other thing. The more you learn, the more you realize you don’t know.”

Is that ever the truth! And I was a living example. I went into this book thinking I knew what I was doing. After all, I’d had decades of experience. But during my four-year quest to meet the best investors on earth, I’ve been humbled over and over again by how much I didn’t know. And I found that unlike the talking heads who claim to have all the answers, the best are essentially humble. Like Ray Dalio, they’ll tell you what they think and then admit they could be wrong.

Riches are not an end of life, but an instrument of life.

—HENRY WARD BEECHER

As my journey continued, I found my mission was evolving. At each stop along the way, I was discovering tools, opportunities, and investment products available to ultrawealthy people that the average person never hears about. And ironically, some of the best ones have very little risk, or they have limited risk with what they call
asymmetric risk/reward
—which means the investors get a big upside potential for very little downside exposure. And that’s what the “smart money” lives for.

It was exciting for me to find out about these opportunities and take advantage of some of them, because at this stage of my life, I’m old enough, fortunate enough, and well off enough financially to have those choices. But my sons and my daughter don’t, and some of my dearest friends don’t, and, most important, likely neither do you (unless you’ve got tens of millions
stashed away and you’re just reading this to see where Ray Dalio puts his money).

So I changed from being just a passive information gatherer in the world of investing to becoming a passionate advocate for my friends and readers.
I wasn’t just going to tell you about something that wealthy people get to do; I wanted to open up these opportunities for everyone.
So I looked for companies that have focused exclusively on the ultrawealthy and then worked to convince them to create new opportunities for investors at any economic level or any age level. I’ve worked to highlight their services, and in some cases, I’ve gone all in and partnered with them to help create new products that will be available to you for the first time. But what I’m most proud of is that I’ve persuaded many of them to open up their services for people who are not wealthy—for free! In the pages that follow, you’ll learn about a revolutionary strategic venture between Stronghold Wealth Management and HighTower, the fifth largest investment advisory firm in the United States, which provides transparent, conflict-free advice to the ultrawealthy. It will now provide some of the same extraordinary planning services at no charge to you, regardless of how much you have to invest. You will learn how to access a complimentary online platform that will allow you to test-drive your broker and see if you’re truly overpaying for underperformance. I’m hoping this could be the beginning of a sea change in the world of personal finance, a real leveling of the playing field for the first time.

Why in the world do they do this? First, it’s the right thing to do. People need to know what they are truly paying for. Second, they know that people with lots of money didn’t always start out with lots of money. It’s the secret to wealth, remember? Do more for others than anybody else does. And if HighTower does this for you at this stage of your life, they’re betting you won’t forget them in the future. You’ll become a raving fan and a loyal client forever.

You get the help you need today for no money and HighTower gets a future client. That’s financial synergy. An opportunity to create the elusive win-win that rarely shows up in the world of Wall Street.

Kindness in words creates confidence. Kindness in thinking creates profoundness. Kindness in giving creates love.

—LAO-TZU

One of the great gifts of “mastering the game” is not only being able to win but to have enough to make a difference for others. No matter how difficult our situation may be, there are always people who are suffering more. When someone creates wealth, it’s his or her privilege, and, I believe, his or her responsibility, to give back to those who are just beginning the journey or those who have experienced tragedies that have knocked them off the path. As I will share with you later, my family was the recipient of a simple act of kindness when we literally had no food, and that changed my entire perspective on people and life. It helped shape who I am today.

So for decades I have worked to give back by feeding more than 2 million people a year through my Anthony Robbins Foundation, and for the last few years, my wife and I have personally matched all their contributions.

Today I’m proud to say that a kid who started with no food personally helps 4 million people a year to feel cared for and fed. In total, over 38 years, I’ve had the honor to feed 42 million people.

I want to use this book as a vehicle to help you develop enough wealth—both physical and emotional—so that you can be a force for good through your economic contributions as well as your time. I will tell you, though, if you won’t give a dime out of a dollar, you won’t give $1 million out of $10 million. The time to give is now! When I had nothing, I began this process. The reward is that if you give, even at the times when you think you have very little, you’ll teach your brain that there is more than enough. You can leave scarcity behind and move toward a world of abundance.

So I’d like to get you started on this path. As you read this book, know that you are not only helping yourself create a new financial future, but you are helping those 17 million American families who face hunger every day.
²

How? I decided to do more in one year than I have in my entire lifetime. In the name of my readers, at the time of this publication, I am donating 50 million meals to the men, women, and children in this country
who suffer from homelessness. You’d be surprised who these people are. Yes, some have been scarred by memories of serving in war and some are mentally or physically challenged. But millions are people just like you and me who had a normal life and then the loss of a job, a health problem, or a family loss pushed them over the edge to where they could not meet their financial obligations. Most Americans are only a few lost paychecks away from insolvency. So together let’s reach out to help.

As I was writing this book, Congress slashed $8.7 billion from the food stamp budget. I witnessed firsthand the devastating impact this had on the volunteers and nonprofit organizations that work in the fight against hunger. That’s why I put up 50 million meals, and I’m using my influence to get matching funds so that we can provide 100 million meals to feed the hungry. You’re welcome to join in and help, but know this: because you bought the book, the one you are holding in your hand or reading on your iPad, you’re personally feeding 50 people. My hope is that by the end of this book, you’ll be inspired to make a small direct donation on your own as well. I have information in the last chapter on how you can use your “spare change to help change the world.” There are so many simple and enjoyable ways in which you can give and create a legacy you can feel truly proud of.

—

Whew, this has been quite a full chapter! I know it’s a lot, but hopefully it doesn’t feel long! Do I have you hooked on what’s really possible for your life now? Can you imagine what it will feel like to take yourself from where you are today to where you really want to be? What would it be like to have your experience of money no longer be a source of stress but rather a feeling of excitement and pride? I promise you the feelings you will have as you conquer this area of your life will create a new momentum not only with financial success but also in other areas of life that matter even more! Are you ready?

One final note, if you’ve read this far, I want to compliment you because, unfortunately, you’re in the top 10% of people who buy a nonfiction book. That’s right: statistics show that fewer than 10% of people who buy a book
ever read past the first chapter. How insane is that? I wrote this book to be simple but also to give you the opportunity to go deep—to master the game, to arm you with the skills to master your financial world once and for all. It’s not meant to be a “little red book of investing.” So I want to invite you now, and challenge you, to commit to take the full journey with me through these pages. I promise you the rewards you will reap will last for decades to come.

So turn the page and let me first give you a quick overview of what it will take to have an income for life—a paycheck that gives you the life you have (or the lifestyle you desire) without ever having to work again. Once you achieve this, you will work only if and because you want to. Let’s grab an outline of the road ahead and discover the 7 Simple Steps to Financial Freedom.