MONEY Master the Game: 7 Simple Steps to Financial Freedom (9 page)

So I want to prepare your mind for each of the steps that are coming. In this way, you’ll be ready to take the necessary actions that will guarantee that your path to financial freedom is realized.

This book is designed to give you mastery over a subject that torments most people because they’ve never taken the time to master the fundamentals that would set them free. And mastery means going deep. Anyone can read something, remember it, and feel like he or she has learned something.
But true mastery requires three levels.

The first is cognitive understanding.
It’s your ability to understand the concept. Any of us can get it. And many of us already have a
cognitive
understanding of personal finance and investing. But that and $3 will almost buy you a cup of coffee at Starbucks! What I mean is that information by itself is not valuable. It’s only the first step.

You start getting real value when you reach the second step: emotional mastery.
That’s where you have heard something with enough repetition, and it’s stimulated enough feelings inside you—desires, hungers, fears, concerns—that now you become conscious and capable of consistently using what you’ve learned.

But the ultimate mastery is physical mastery.
That means you don’t have to think about what you do; your actions are second nature.
And the only way to get it is through consistent repetition.
My great teacher, Jim Rohn, taught me that
repetition is the mother of skill.

I’ll give you a perfect example of where I fell short in this area. In my early twenties, I decided I wanted to get a black belt in martial arts, and I had the privilege of meeting and becoming dear friends with the grand master Jhoon Rhee. He’s the man who brought Tae Kwon Do to this country and who trained both Bruce Lee and Muhammad Ali in the art. I told him I wanted to gain my black belt in the shortest time in history, and I was willing to do whatever it took in terms of practice, commitment, and discipline to break the record. He agreed to travel on the road with me to complete my training. It was brutal! I’d often finish a seminar and arrive at one o’clock in the morning for my training, and then work with the master for another three or four hours. I would have to get by on four hours of sleep at most.

One night, after a particularly long period of practicing the same exact move at least 300 times, I finally turned to my teacher and asked, “Master,
when
can we go on to the next move?” He looked at me sternly and said, “Oh, grasshopper, this
is
the next move. The fact that you can’t tell the difference between the move you made this time and the one you did before shows you are still a dabbler. Those fine distinctions are the difference between a master and an amateur. And mastery requires this level of repetition. With each repetition you must learn more,” he said with a smile.

Do you see my point? This book was not designed for you to skim through in an afternoon.

As you read, you’ll notice that this book is unlike anything you’ve encountered before because it reflects my unique style of teaching. You’ll be asked a lot of questions, and you’ll sometimes see facts and phrases that you’ve read before. There will be a lot of exclamation points! This isn’t an editing mistake! It’s a technique designed to mark out key ideas and to build
knowledge into your mind, body, and spirit so that action becomes automatic. That’s when you’ll start seeing results and reaping the rewards that you desire and deserve. Are you up for the challenge?

And remember: this is not just a book, it’s a blueprint. Each section is designed to help you understand exactly where you are in financial terms and help you close the gap between where you are now and where you truly want to be. This work is designed to arm you, not just for today but for the rest of your life. I know you’ll come back at different stages to take things to the next level.

SECTION 1:
WELCOME TO THE JUNGLE: THE JOURNEY BEGINS WITH THIS FIRST STEP

Like all great adventurers, we’ll start by getting oriented for the trip. In chapter 1.4, you’ll learn more about the psychology of wealth, what holds us back, and some simple cures. You’ll uncover what it is you’re really investing for, and unleash the power of the best financial breakthrough strategies. Then, in the next chapter, we blast off. Here
you’ll take the first of the 7 Simple Steps and make the most important financial decision of your life. This chapter is a must read.
You’ll learn how, with even the smallest amount of money combined with the miracle power of compounding, you can absolutely become financially independent in your life without ever having to make a fortune in annual income. You’ll activate this system by deciding on a portion of your income to save and invest for compounded interest. You’ll become not just a consumer in the economy but also an owner—an investor with a stake in the future. You’ll learn how to build your own automated “money machine,” a system that will generate income for you for a lifetime while you sleep.

SECTION 2:
BECOME THE INSIDER: KNOW THE RULES BEFORE YOU GET IN THE GAME

Maybe you’ve heard that old expression, “When a man with money meets a man with experience, the man with the experience ends up with the money, and the man with the money ends up with the experience.” Now that you’ve decided to become an investor, this section explains the critical rules of the game so that you don’t fall prey to those players with all the experience. This road map shows the way through the investment jungle that Ray Dalio was talking about, with the worst danger zones marked with big red
X
s. These are the marketing myths—some people call them investment lies—that are often designed to systematically separate you from your money. You’ll learn why the returns the mutual funds advertise are not the returns that you actually receive. I know it sounds crazy, but the 1% fee that you think is the total cost you’re paying is really only one of more than ten potential fees, and that your average mutual fund might be eating up 60% of your potential returns over time! Remember, in this short section alone, you’ll save between
$250,000 and $450,000 minimum,
back in your pocket without getting any better returns over your investment lifetime! And you’ll see that this amount is all documented—based on studies, not based on my opinion or funny math. We’ll also discuss the deceptions that can be a part of
target-date funds
and
no-load funds,
and arm you with a real understanding of how to protect yourself from firms that often tailor these products and strategies for
their
maximum profit—not yours! By the end of this section you’ll have taken your second step, and even if you only have a small amount of money, you’ll be investing it like an insider.

SECTION 3:
WHAT’S THE PRICE OF YOUR DREAMS? MAKE THE GAME WINNABLE

Together we’ll explore your financial dreams, and set some realistic goals that will make the game truly winnable. Most people have no idea how much money they’ll need to achieve financial security, independence, and
freedom. Or the giant numbers they have in their heads are so intimidating that they never even start a plan to get there. But in chapter 3.1, you’ll figure out what you
really
want, and it’s going to be exciting—especially when you realize that your dreams may be closer than you think. You’ll not only dream, but you’ll turn those dreams into reality—a plan—in chapter 3.2. It’s going to be different for everyone, and we have the software to customize it for you. You can do it online or on your app, where you can keep it and change it as many times as you want until you find a realistic and achievable plan. And if you’re not getting to your dreams fast enough, we’re going to show you five ways to speed it up in section 3. By the time you’ve taken Step 3, you’ll not only know how to build wealth for your future retirement, but how to enjoy it along the way.

SECTION 4:
MAKE THE MOST IMPORTANT
INVESTMENT
DECISION OF YOUR LIFE

Now that you’re thinking like an insider, you know the rules of the game, and you’ve learned how to make the game winnable, it’s time to make the most important
investment
decision of your life: Where do you put your money and in what proportions?
Asset allocation
is what every Nobel Prize winner, every hedge fund manager, every top institutional investor, bar none, told me was the key to successful investing—yet virtually 99% of Americans know little or nothing about it. Why? Maybe it seems too complicated. But in chapter 4.1, I’m going to make it simple and also show you where to go to have an expert assist you online. Proper asset allocation means dividing up what you’re investing into buckets that are secure and give you peace of mind, versus buckets that are riskier but may have greater potential for growth. It’s the ultimate bucket list! And when you complete Step 4, you’ll not only know how to
become
wealthy, but how to
stay
wealthy.

SECTION 5:
UPSIDE WITHOUT THE DOWNSIDE: CREATE A LIFETIME INCOME PLAN

What good is investing if you don’t have any money to spend? Most people have been so conditioned to focus on putting more money in a 401(k) plan or building their retirement account they forget that they’ll need to draw it down as income some day. And since account balances fluctuate (remember, they don’t just go up!), we must create and protect our income plan. Remember 2008? How do you protect yourself from the next crash? How do you set up a portfolio that avoids getting whipsawed? How do you know you won’t end up outliving your money, which is so many people’s number one fear? You may be blessed with a long life, but it may not feel like a blessing if you run out of money. In this section we’ll offer specific insights into one of the best-kept secrets in the financial community and help you develop a guaranteed lifetime income plan—a certain revenue stream that can form the foundation for true financial peace of mind.
We’ll explore creative ways you can stop or drastically limit losses and increase your gains
—using the investment vehicles favored by banks, large corporations, and some of the world’s wealthiest individuals. What do they know that you don’t know? It’s how to have the upside without the downside, and to make sure your gains aren’t eaten away by taxes.

SECTION 6:
INVEST LIKE THE .001%: THE BILLIONAIRE’S PLAYBOOK

We’ll hear what’s good and what’s challenging about the state of the global economy—how we got here and what may be coming next—from some of the clearest and most influential thinkers in the financial world.
Then you’ll meet the masters of the game, 12 of the most colorful and brilliant minds in finance, and learn what has guided them through every economic condition.
We’ll ask
Paul Tudor Jones
how he made a 60% monthly return in 1987 by predicting the Black Monday crash, when the market was burning down around him. And how, 21 years later, he was able to make nearly 30% when the market lost nearly 50% and the world seemed to be falling apart again.
Plus we’ll look at how he has avoided losses and managed to have 28 straight profitable years in every conceivable market, never losing a dime. Some of the people you’ll be meeting in our “Billionaire’s Playbook,” such as
Charles Schwab, Carl Icahn, T. Boone Pickens, Ray Dalio,
and
Jack Bogle,
struggled when they were growing up—they weren’t born with a silver spoon in their mouth. So how did they make it to the top? We’ll ask what money means to them, and we’ll peek into their actual portfolios. By the time you’ve finished Step 6, you’ll know how the .001% invests.

SECTION 7:
JUST DO IT, ENJOY IT, AND SHARE IT

Here we’ll come up with an action plan to help you live a better, fuller, richer, more joyful life. And we’ll talk about what to do to stay on target. I guarantee we’ll blow your mind with some of the breathtaking new technologies that will make even the
near
future better than you think. This is the opposite of what most people believe. According to an NBC–
Wall Street Journal
poll, 76% of Americans—an all-time record—think that their children’s lives will be worse off than their own! But you’re going to get an insider’s look at what’s coming from some of the most brilliant minds of our time. We’ll hear from my friends Ray Kurzweil, the Edison of our age, and Peter Diamandis, creator of the X Prize, about new technologies coming online: 3-D printers that will transform your personal computer into a manufacturing plant, self-driving cars, exoskeletons that enable paraplegics to walk, artificial limbs grown from single cells—innovations that will dramatically change our lives for the better in the very near future. I’m hoping this will inspire you, and also show you that even if you somehow screw up and don’t get your financial act together, you’ll still have a better quality of life. And for those with the resources, you’re looking at a future of limitless possibilities.

We’ll wrap up with the simple fact that the secret to living is giving: sharing with others not only gives you a greater quality of life but also brings you a greater experience of joy. And you’ll learn about new technologies that
make giving painless and fun. As you feed your mind and build your own wealth, my hope is that you’ll do well enough to help others. And remember, you’re my partner in giving now. And as you’re reading, someone in need is being fed.

I don’t believe people are looking for the meaning of life as much as they are looking for the experience of being alive.

—JOSEPH CAMPBELL

I’ve made these 7 Simple Steps to Financial Freedom as clear and simple as possible for you. Now it’s up to you to take action and follow through each of the seven steps, one at a time, to get the job done.