People of all income levels, from all walks of life, looking for more control over their lives will learn a system that will give them financial freedom. This system along with wisdom for over 50 leading financial experts gives readers the tools to devise a lifetime income plan. Tony Robbins dispels common myths about how to save and invest so anyone can build their own empire.
My key Takeaways from “MONEY Master the Game, 7 Simple Steps to Financial Freedom" by Tony Robbins
Takeaway #1 Are You Exercising Your Money?
The answer is probably no. But just like you have to exercise your dog and exercise yourself, you have to exercise your money to make it grow – Don't let it stay stagnant!
Takeaway #2 Have a Financial Goal
A goal without a plan is just a dream! So get specific with your financial goal whilst also remaining realistic. Saying 'I want more money' doesn't cut it because the coin you found on the street counts as 'extra' as does that $25 from Auntie Sue for your birthday! Look at the figures and see if you need an extra $200 a week or an extra $2,000 a month to feel free from financial stress. Then create a plan of how you want to create that extra money. You might decide that your goal is to earn enough money through investments to cover your basic monthly expenses or to make enough from investments to cover travel and other fun things.
Takeaway #3 Start Slow But Don't Wait
Everyone knows that the tortoise wins the race so don't worry about the small amounts you are saving or the length of time it's taking you to reach your goal, just keep going, especially when times are hard and you want to skip a month or quit entirely. Most people think they can accomplish more than is actually possible in a year, but long-term they underestimate what they can achieve in a decade – It is always possible to catch up.
Takeaway #4 Compound That Cash
Compounding means letting your savings/investments grow year after year by allowing the interest to build up. You need to be putting some money aside each month for this. Think of saving as your Freedom Fund for later in life, and know that your older self will thank your younger self for making this commitment.
You should aim to save 10% of your income minimum but if that's a struggle, start at 5%. You can always find money to put into your freedom fund, even during the toughest times... Simply skip that takeaway meal, avoid recreational shopping, don't buy wine and chocolate for a month, and use the money you've saved to put into your freedom fund remembering that the more you add, the more you'll get in return.
Takeaway #5 Invest Wisely
Investing can be a daunting prospect for many people, they don't want to invest in the wrong thing and think it safer to hire a stockbroker or other finance professional to do the job for them. But there's a problem with this – You know what's best for your money, not another person. A financial advisor or stockbroker is getting paid whether you make a profit or not. Thankfully, there is one person you can trust though, a fiduciary. A fiduciary is required by law to have your own interests at heart, not their own, not a company. That's not to say you can't learn to invest your own money wisely – You just have to trust your ability, and do careful research, remembering that you're in this for the long run, investing is not a get rich quick scheme. Find someone who has already done what you want to do and analyze how they did it, use their tips and use their life to keep you inspired.
Takeaway #6 The Money Buckets
The key to financial freedom and continuing to grow your freedom fund is through diversifying. In the same way that you don't want to keep all of your eggs in one basket, this method uses buckets to explain the concept. There are three different 'money buckets' that you need to be filling and should try to keep balanced.
The first 'money bucket' is the most secure one. You might not get as much return on this 'bucket' but it's unlikely to lose value – Bonds are a good example for this.
The second 'money bucket' is your growth fund, most likely used for stocks and shares. It's not as secure as the first bucket but could get you big returns.
The third 'money bucket' is the vital one, it's the one that improves your lifestyle. You place some of your profits from the first two buckets into this one and spend it as you wish whether that's spent on travel, buying a new car, or treating the kids.