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Ralphs. Fresh for everyone. ♪ Today on the show, I have a comprehensive review and in-depth critique of Tony Robbins' new book called Money, Master the Game. I'm going to share with you the general outline and framework of the book, share with you the lessons I learned and the things I loved, and then go through some of the minor and major flaws of the book in detail.

♪ Welcome to the Radical Personal Finance Podcast. My name is Joshua Sheets and today is Monday, December 1, 2014. Six days after it was promised, I finally bring you the show of... Excuse me. Bring you the show with the review of Tony Robbins' new book. It's going to be packed.

Stick with me. ♪ This show today is actually going to be the first book review that I have done on the Radical Personal Finance Podcast. And there's a reason that I'll get to in just a moment why I haven't done them. And let me tell you straight up off the top, this thing sank me to try to do a good review.

And I'm not sure that I have the right temperament and personality to do good book reviews for a show like this, because this thing was a beast to put together. And as you'll hear when we get into the content, it was probably unnecessarily too much of a beast. There are a few ways that I could have handled this, but I'm doing it the way that I would be interested in listening to.

And it was a challenge to prepare this review. I hope you guys like it. Let me quick outline for you what you can expect in the show. And then also, let me, then I'll give you a little bit of preamble about why this thing is six days late, because I think it's important, you know, because I've learned something even going through that.

So this show, I got Tony's new book. I didn't get an advanced copy or anything like that. I wasn't not cool enough yet to get those. So I just ordered it and I had pre-ordered it and it showed up at my door. And so I went ahead and read it and it's a great book.

It really is. It's a great book. And I prepared a review, but this review is probably going to be a little different than any other book review that you've often heard. That I'm going to try to do in an audio format. I'm going to try to use this book as an outline for teaching concepts, that some of the concepts that Tony teaches.

I'm going to do that without plagiarizing his content, but I am going to reference it and encourage you to read it. And then I'm also going to critique the book and point out some of the flaws in the book, because there are some minor flaws and there are some major flaws.

I will make note of the timestamps for the different sections. I expect today's show to be fairly long. It could be two, three hours or more. I don't know. You can obviously know at this point when you see how long it is on your recorder, or on your player.

But I expect it to be long and in-depth. So feel free to use those timestamps if you want to click around. And please divide this up into multiple listening sessions. This is not, I'm not going to be repeating myself multiple times. I'm going to be attacking the subject matter from a few different contexts and using each of my points and critiques as a way to teach you about a basic concept in financial planning.

I do need to first apologize to you. I learned something this last week in preparing for this review. Today is Monday as I record the show, December 1. And my last show was last Monday, episode 108. And I had planned to have this review finished by Tuesday and then ship it out the door and then Wednesday do for you a show on gratitude, essentially, in preparation for the American holiday of Thanksgiving.

And I didn't get it done. And I also didn't do a very good job of communicating with you guys. I didn't disappear. I got a couple of emails and a voicemail saying, "Joshua, where are you?" And I apologize. I should have done a better job communicating. I had, just before I started recording the show, had a great email from a listener who shared with me his thoughts.

The listener said, "Don't leave us hanging like this." Because basically what came through is it's an abandonment of, it's essentially a violation of trust, of the trust that you put in me because I've committed and I've set a standard of doing a daily show. And so I never even thought about it that way until I had heard from the listeners.

And I apologize to you guys. I'm new to this whole podcast and online stuff. And I never thought about it that way. I just figured if I don't have something to, if I'm not ready to say something that's worth listening to, why would I put something out? But you're right.

Consistency is important. And so I've learned my lesson. This show, I've taken a lot of time preparing for it for multiple reasons. Number one, I had to read the book and it's a 600 page book and it's heavy and it's thick and it's meaty. And it's a great book, but it's heavy and it's thick and it's meaty.

Number two, as I started preparing a review, I needed to fact check a bunch of stuff. And so that kind of took a lot of time. And even in terms of just preparing for it, it just sucked up a lot of time. And I wanted to do a good job with it, especially because I think it's a great book and I also have some serious concerns over it.

And poor little old me, who am I to go up against Tony Robbins? One of the great icons of, I guess, the self-help and self-improvement, life mastery, to use his branding, the life mastery movement. So I wanted to do a good job with it. On Tuesday, I had a busy day with a couple of interviews.

And what I should have done was gone ahead and played some interviews on Tuesday and interview on Wednesday just so their show would be out, as I'd said, instead of just simply not doing a show. But I learned my lesson. I apologize to you all. So I will be much more conscious of that going forward.

So enough of the preamble. I apologize about missing the days. And then Thursday, we left. My wife was a little bit sick, just a bunch of things, but I could have done a better job communicating. So just busyness. And then the holiday that we had here in the United States was out of town Thursday through Sunday.

But I'm back now. Let's get to the meat of it. So this show is a book review. And I don't really like doing book reviews. I think it's important to do them, especially for many people that can be a really good thing to do. But I don't really like, personally, really want to do them on the show, at least not in audio format.

Because in a book review, often you're going to be necessarily critical. And I don't really like to be critical. More than anything, I like to just simply shut my mouth and learn what I don't know. And I also, when doing a book review, I often feel unqualified to do reviews of being critical of other people's work.

I really feel what I think the author must feel when they pour their heart and their soul into a book for years, usually, to prepare a good book. And then it's criticized. And I imagine myself in that place. And I think, what would I feel? And so I don't like to be very critical.

But this show is constructive criticism. And I really admire Tony Robbins for taking on this challenge. I think it's an awesome challenge that he's taken on and very, very needed. In summary, this book really is a great book. It's well worth the money. It's extremely effective at doing a lot of what it's designed to do.

And it's probably going to be one of the best expenditures on a money book that you could make. I'd encourage you, don't get it from the library. Buy it. I wore out four highlighters on the book. And I filled all of the back pages where I take notes in books with notes.

So I ran out of room at the back. And so if that's any kind of endorsement, it really is a great book. Books are phenomenal when you start looking at them as far as the return on investment. I've made a decision sometime back to not save money on books.

I've gone through a period of time where I used to buy a ton of books. And then I bought way too many books. And then I quit. And I said, I'd get them all from the library. And then finally, I realized, for me, I need to destroy a book with an ink, with highlighters, and with pens for me to learn from it.

And when you look at the amount of value that you can get from a book, it's phenomenal. And this book, the primary reason that I bought the book was when I heard who Tony Robbins interviewed for the book, I pulled out Amazon, and I pre-ordered it immediately. Because evidently, according to his notes, he interviewed almost 50 people or something around 50 people, many of them incredibly successful billionaires, many of them involved in the investment markets.

And these are people that I don't, at the moment, have access to. I would love to sit down and speak with all the people that he spoke to. But I haven't developed the ability to get that access myself. And I haven't made the time in order to build the platform like Tony Robbins has.

So I just figured, man, if I can listen to Tony or read Tony's interviews of that, even if they're just excerpts, that'd be phenomenal. He puts excerpts of the interviews in the book. But just the excerpts alone are worth the price of admission. I'd pay thousands to get the full excerpts of his interviews.

I'm sure he has them in his notes. Man, I'd pay thousands to get a book with those done. Because, I mean, and that would be a cheap price when you compare it to what-- when you compare the value of what you can get from somebody just by reading something like an interview transcript.

I would love to do the research process for a book like this. It's a great book. And what Tony Robbins tried to do, as far as when he set out, is he tried to create a book that would appeal to beginners and also to experts. And to the poor, just getting started.

And to the rich, you were already arrived, so to speak. And so he set himself a tall benchmark. Did he hit it? I'm not so sure. I do think it's a great book, but I don't see any way that he hit that. But I think that there are ideas in it that can be pulled out of it and applied to just about any situation.

My primary motivation to reading the book was to gain access to the billionaire transcripts. And also, I wanted to learn how to teach. One of the things that I am focused a lot on is trying to learn how to be a better teacher, especially a better teacher of financial concepts, to you, the audience.

I'm really trying to build and practice the skills of being direct, succinct, using appropriate metaphors and analogies, but not using hyperbole. And so I wanted to see how Tony Robbins did it, because he's widely renowned as being a phenomenal teacher. I've never met him. I would love to meet him.

I'd love to interview him for this show, which, by the way, if any of you know how to get in touch with and do those author interview requests, things like that, I'd love to interview him on a show like this. I live probably 15 minutes from his house in Palm Beach.

But I never met him, never been to any of his seminars. Years ago, I listened to his-- I bought his courses, a couple of his courses. I bought his personal power course, his time management course, and his healthy body course, something like that. And I really enjoyed them. I found probably the personal power course to be the most interesting and the most applicable.

The other two, I thought the ideas were interesting, but I wasn't able to apply them to my life very effectively. They were long on kind of psychological tools, but they didn't seem to fit-- the psychological tools didn't seem to fit my needs at the time. So I still have them.

His time planning system, rapid time something or other, it was interesting, and I valued it. But I didn't really-- wasn't able to apply them. But the personal power ideas were very interesting and very useful. Someday, I want to go to his seminars. I really do. I had a friend that went recently and really benefited from one of his seminars.

But just for me right now, I don't think I've extracted all the value from his CDs or his books yet. In order for me-- to be worth it for me to spend $500 or $15,000 on a seminar, I don't need--at this point, I don't need the emotional lift. I don't think I need the emotional lift that a seminar provides.

I need to focus on just the application. I'm pretty clear on applying the technique without needing to go to a seminar. But books are a different animal. A book in a seminar is very different. In fact, he says that right in the preamble of his book as far as developing the book and trying to use it as a teaching method.

And I really love more than anything the purpose of the book. He sets out and he basically says how he got around to writing it because it's been 20 years since he's written a book. And so he laid out for himself-- he talked about the history in the beginning about basically watched the financial crisis in 2008 and saw basic criminal behavior, essentially, and then people walking away scot-free on Wall Street.

So he set out the purpose of this book. And on page 30, he says, "This book is committed to one primary outcome-- to set you up so you have an income for life without ever having to work again--real financial freedom. And the good news is it can be achieved by anyone, even if you're starting out in debt, deep in the hole, no exaggeration, with a little bit of time, consistent focus, and the right strategies applied, you can get to financial security or even independence in a few years." So I thought, what a great purpose for a book.

That's exactly what my show is about. And I really--man, if I had to create that for a purpose statement of my show, I'd be totally--that's exactly what this show is about. To me, I want to read a book like that. And there are really some amazing things and concepts taught in this book.

But in some things, you're going to have to read through the lines. Read through the lines and look for the themes that are surrounding some of the words. You got to ignore some of the words. In many ways, the book is actually a study in contradictions. As I was going through it, I was constantly making notes.

This contradicts that. This contradicts that. This contradicts that. I'm going to give you many of those examples. It used to bother me in a finance book. But as I've matured, it bothers me less. It bothers me because I feel like an author should be able to remove some of those contradictions or should address them.

But I recognize now that finance, the field of finance, is inherently contradictory. And I'll give you many specific examples of those contradictions so you can understand what I mean. Because one of the challenges you have to learn, I think, to deal effectively in the world of finance, you have to learn how to hold seemingly contradictory ideas in your head at the same time.

That's tough because we're not taught to do that in our society. We're mainly taught black and white, right and wrong. This is right or this is wrong. This investment strategy is right. This one is wrong. And it was frustrating for me until I finally recognized, you know what? I can hold these things at the same time in my head.

I also used to take books like this as gospel, essentially saying, this book is right. It has the answers. And now I just say, what can I learn from it? How can I fit this into my own mental models? And I do like to argue with books. I like to argue with the author and see whether I can, in my head, defeat the author and say, OK, I know something different.

Or I can say, hey, this author defeated something that I was able to deal with. And I don't know any other way to do that. I think books are a good way to argue with people. Arguing with people in verbal writing-- or excuse me, verbal conversation, I think it's usually completely ineffective.

Because then you have to deal with a relationship dynamic and hurting the relationship, and you never win an argument. But arguing with books, to me, that is a key thing. Because that's how we change. The book is long. It is 600 pages. And in many ways, this gives me courage.

I've struggled with self-confidence as far as my long shows. And some of them I really regret. That was why I didn't record this show sooner. As I said, I regret some of the shows that I published, because I don't think they were packed with enough information in the past.

And I've learned from that. And I am learning from that. But then also, sometimes when I do a show and I feel like that was perfect, but it was three hours, then I look out in the marketplace and I say, well, no one else is doing that. Is it too long?

The average podcast is supposed to be 30 minutes long. That's what everyone says it should be. But if Tony Robbins can sell-- he says his average seminar is 52 hours. If he can sell 52-hour seminars and 600-page books on money, I figure I could do two-hour-long podcast episodes, as long as they're packed with content and they're entertaining and they're riveting.

And the way he set out this book is really interesting to me. He is a master teacher. And he says specifically up front that his writing style is different than many other authors. He specifically says, stick with me, because I'm teaching you in a certain way. And he explains how to do that.

I don't know. I assume it's effective, because there's millions of people that have done it. It's not my favorite way of consuming content and consuming writing. But I did find it to be a good book. So maybe it was effective. Time will tell, right? The general layout of the book is that it's organized around Tony's seven simple steps for success.

So he lays out these seven steps. And this is the organizing principle. And each of the seven steps has sub-steps and sub-chapters. The chapters are numbered one through seven, and then 1.1, 1.2. Step one is a focus and a desire to basically say, make the most important financial decision of your life, which is to be an investor and not just a consumer, and decide what percentage of your income to put away for the future.

Automate it, and then use some mental tricks to increase that amount of income that you're saving over time. So he starts with a commitment to action, essentially saying the number one biggest decision in your life is, what percentage of my income will I save? Will I save 20%? Will I save 10%?

Will I save 50%? That's step one. And I really thought that was valuable. He goes in detail into an idea showing some psychological research on the focus of save more in the future, where they've substantially increased the amount of money that people were saving if they committed to future increase of savings.

I learned this years ago from Brian Tracy. He had a financial audio course of some kind that I listened to, and he talked about, anytime you have an increase in income, save half and spend half. So if you get a 6% raise, increase your savings by 3% of your salary and spend the 3% of your salary.

That way you can build some of that emotional gratification of the higher income and also higher savings. So in my mind, that's a really great idea. And I'm not gonna actually criticize these steps at the moment very much. I'm just gonna lay them out for you. Step two is become an insider and know the rules of the financial game before you get in.

And this section is organized around nine different myths that he talks about. Myth one, he says, the myth is that it's possible to beat the market. And 96% of actively managed mutual funds fail to beat the market over any sustained period of time. And essentially, myth one is very clear that passive index investing with Vanguard is the solution.

It's very strong on that. Myth two is that the myth is that fees aren't super important. And he shows how fees, the amount of money, the fees that you pay on investment strategy are incredibly important. And they are incredibly important. He illustrates that over time, small fees become massive as far as their impact to your actual return.

Myth three says that essentially, the returns that we list in the mutual fund literature is what you get. And basically, this is a debate over dollar-weighted returns versus time-weighted returns. I'm going to go into detail on this one when I start the critique in a moment. But essentially, the idea is there's two different ways of measuring the rate of return that you receive on an investment portfolio.

A time-weighted return doesn't track a specific dollar that is in the portfolio. It doesn't track your specific results as an investor. It just simply removes the dollar-weighting of returns and says, "On January 1, the portfolio from January 1 to December 31 performed according to such." Dollar-weighted returns, on the other hand, are basically tracking individual dollars through the portfolio instead of focusing on the time.

And I'm going to go into that debate in detail because I think it's one of the big flaws of this book. Myth four is that I'm your broker and I'm here to help. And so essentially here, he's talking about the importance of a fiduciary standard for all advisors and for you to work with an advisor who's operating under a fiduciary standard.

This one also has a lot of flaws in it, which I'll point out in a moment. Myth five is that your retirement is just a 401(k) and here he basically hammers all the problems with the 401(k) system with a major focus on expenses. Myth six is that target date funds are perfect.

You just set them and forget them. This one's really unclear, in my opinion. But essentially, the myth is that people don't really understand the target date funds and also that the asset allocation that the target date funds are selecting is not necessarily right for you. And I agree with both of those points.

People don't understand target date funds and there's no proof that that asset allocation is for you. But it doesn't deserve inclusion here in the myth. Myth seven is all about annuities. Essentially, the myth is that annuities are bad. And he says that not all annuities are bad, that there are some good ones.

Myth eight is you got to take huge risks to get big rewards. And his point is that there are products, investment products, that give you great rewards without significant risks. Specifically, he talks about buying structured notes, investing in market-linked CDs, and fixed indexed annuities. And then myth nine, he talks about the lies we tell ourselves, which is basically that we have limiting beliefs about what's possible.

His next section is to make the game winnable. This was my favorite section, actually, where he focuses heavily on calculating the actual price of your dreams. And he illustrates that the numbers that you need are probably far less than you actually think. And I learned this was just doing financial planning, that a lot of times when people would talk about how much money they need and what they need to be financially independent, they're crazy high.

They don't need anywhere near as much money as they need to actually achieve their dreams. And so they're either crazy high or crazy low, and a lot of error in between. And I'm going to steal, actually, some of the concepts from this. The biggest benefit that I see from this section that I'm going to steal going forward is he lays out five financial dreams for people to consider.

And he talks about different levels of financial success. Because when talking about what is your dream, I want to have $10 million, well, what do you want the $10 million to do? And if you're starting with a net worth of negative $1 million or negative $200,000 or negative $20,000 because you just got deeply in debt with student loans, then he talks about that.

And he says, you probably don't need that much, but let's break the goal down into lesser dreams. And so he lays out here five different stages on what you should pursue, which is financial security, financial vitality, financial independence, financial freedom, and then his final one, absolute financial freedom. And I'm actually going to steal those five things, and I'll credit him whenever I can, but I'm hereby officially declaring I'm stealing his five steps.

But I'm going to add some other steps, which I'll go over in a moment when I get to specific ideas that I thought were really powerful. Immediately following those five steps, he talks about ways to increase your speed with how quickly you can get those investment results or those financial results, which is to spend less, save more, earn more, cut fees and taxes, and get better returns.

So I thought that was really, really, really neat. The next section is all about making the most important investment decision of your life, which is your asset allocation. And here he starts with focusing on how much of your money do you put into a security bucket instead of a risk or a growth bucket?

And this is valuable and important. It's also flawed because there's not enough framework around it to actually know, well, how would I decide? There's got to be some methodology for deciding, and that's not provided in the book. Number five, create a lifetime income plan. Here he goes through some different portfolios with a major focus on Ray Dalio, who is a hedge fund manager.

His all seasons portfolio, which is a playoff of his all weather portfolio, which is the actual portfolio he manages, which we'll cover in detail, and also annuities. Number six is to invest like the .001%, and here he goes through the interviews with those billionaires and hedge fund managers, et cetera, and investing titans.

And then seven is just do it, make it happen, and enjoy it and share it, which is about philanthropy. So it's a really great book, and you can't fit everything into a book. I get that. But I'm going to use this to show and teach you about some of the major flaws that there are and some of the major lessons in the financial business.

And I'm going to start with things this book does really, really well. And he does so much well in this book. First, he lays out very well the problems that are facing aspiring retirees. If you work with a financial planner, if your financial planner hasn't been talking about this with you, you need to bring this up with them.

But there are some serious challenges. Facing the retirement market, lifespans are increasing. Page 31 of the book, there's a 50% chance that among married couples, at least one spouse will live to the age of 92, and a 25% chance that one will live to 97. So basically, one out of four, one out of four couples interpreting those statistics, once they reach a certain age, it should be what that statistic is based upon.

Once you reach about age 60 or 65, one out of four of couples, there's going to be a spouse that lives to the age of 97. That's phenomenal when you look at how do I plan for a long-term retirement. Simply put, there's a quote from John Chauvin, who is a Stanford University professor of economics, says, quote, "It is not realistic to finance a 30-year retirement with 30 years of work.

You can't expect to put 10% of your income aside and then finance a retirement that's just as long." And so this is a major deal. He talks about the increasing volatility of markets, which lead to increasing fear, which lead, in my words, to increasing bad behavior investment. Talks about decreasing government welfare benefits.

If you go back and you look in 1950, coming from page 34, in 1950, there were 16.5 workers paying into the social security system to support one person getting benefits. Now it's 2.9 workers per recipient. That's a tremendous change. And also he talks about the fact that the wealthier you are, the less likely you are to retire.

Here, he actually cited an interesting study. Well, he didn't cite it. One of my complaints is that there's no bibliography in the book. In the section that would be a bibliography, he refers you to the website and there's no bibliography on the website, at least not that I can find.

And I did several types of searches to try to make sure that I found it. So that's one of my complaints. I had to find these things by hand. But he references in the book, he says, quote from page 34, "Studies show that the more money you earn, the more likely you are to keep working.

It used to be the goal was to get rich and retire by the age of 40. Now the goal is to get rich and work until you're 90. Nearly half of all individuals who earn $750,000 per year or more say they will never retire, or if they do, the earliest they would consider it is age 70.

How about the Rolling Stones and Mick Jagger at age 71, still rocking the world? Or think of business moguls like Steve Wynn at 72, Warren Buffett at 84, Rupert Murdoch at 83, and Sumner Redstone at 91." So I went and found that study. And what it actually comes from is a study by the Spectrum Group.

And it's entitled "The Financial Attitude of Wealthy Investors Based on Income Spectrum." Now I couldn't find the actual source, the actual study. They wanted, looked like about 3,500 bucks for it. So I found a couple of articles that talked about it. And essentially it is that statistic that is simply saying that the richer people are much less likely, or excuse me, the higher income earners, not necessarily synonymous with richer people, are much less likely to want to retire early.

And there may be various reasons for that. It may be that they enjoy what they do more. It may be that they can't support the lifestyle and they haven't saved enough money to support a $600,000 a year lifestyle. There may be many reasons. But that's been something that I've suspected, but I've never found any numerical evidence for that.

And so I was thrilled to find that. He does a really great job in the book of talking about the importance of starting early. And he begins the book with this. It's on page 50. He talks about tap the power, make the most important financial decision of your life, which is to start and to start early.

And he talks a lot about the benefit of compound interest. And it's so, so key. He uses the example of two brothers, William and James, in his story, that William opens a retirement account at the age of 20 and invests $4,000 for the next 20 years, from the age of 20 to 40.

And at 40, he quits funding the money, putting any more money in it, but leaves it alone and it grows at 10% per year. His brother starts at 40 and puts in $4,000 a year with the same return and keeps going until he's 65. But the difference is, in the end, the brother who started earlier, even though he'd only invested a total of $80,000, had two and a half million bucks.

But on the flip side, the brother who started later, he had invested a total of $100,000 and he had less than $400,000. $2 million gap because of that point of starting early. And to me, this is one of the most important lessons to start by teaching somebody is the power of compound interest.

So valuable. He talks a little bit about the importance of avoiding bankruptcy and wipeout. And he does this in the context of talking about athletes. He goes through the lesson that essentially, you can't earn your way to financial freedom. You have to actually save and then put a plan in place for avoiding problems.

He goes through Kurt Schilling, a baseball pitcher, earned more than $100 million and then went bankrupt. He's $50 million in debt. Kim Basinger, an actress, she earned more than $10 million a pic per picture and she ended up bankrupt. Marvin Gaye, Willie Nelson, MC Hammer, Meat Loaf, made loads of money and all of them were nearly bankrupt or bankrupt, actually bankrupt.

And so amazing to me because those examples just blow my mind every time you think about them, about how much money you can earn and then you can simply outspend it if you're not careful. So very, very valuable, very, very valuable illustration. He talks really well about the value of why you invest and then essentially a mental framework that you're investing to build a money machine to fund your life.

One of my favorite quotes from the book comes from page 54. Quote, "You're already a financial trader. You might not think of it in just this way, but if you work for a living, you're trading your time for money. Frankly, it's just about the worst trade you can make.

Why? Well, you can always get more money, but you can't get more time." In my mind, this is one of the key things that differentiates different people and their success with becoming investors. Those who become investors become investors because they see the value of becoming wealthy and living off of their portfolios, living off of their investments.

That's a major factor. If investing is viewed as deprivation, the idea is, "Well, I can't go out and buy this shiny new thing, that shiny new object syndrome, this shiny new thing that I need," whatever it is, whether it's at a new iPhone or right when it comes out at full retail price or whether it's a brand new mega yacht that just happens to be the latest, coolest thing because it has two helipads on the top instead of one, whatever that shiny new object is at your level at which you play the game, if you don't see investing as being superior, essentially investing is superior because it allows you to go on and have more in the future, you never invest successfully.

You just always view it as deprivation. I think that's why people have trouble saving money. If you have a reason to save money, a powerful, compelling reason to save money, a clear vision of what it's going to do for you and a belief that it's attainable, then I think it's fairly simple to save money at that point in time because it's compelling to you.

Near the end of the book, Robbins talks about timing, essentially that those who are skilled with investors, they're able to trade a little bit of current gratification and pleasure for that compelling vision of being able to have more in the future and to me, that is key. He gives some amazing stories in this section which is just awesome.

I love these stories. I've collected them just partly for myself but he talks about how if you start early enough and essentially these are the power of compound interest, if you start early enough and you set aside consistently and if you get decent returns on your money, you can build up an incredible asset base with a little bit of focus.

My favorite story because it's the most extreme was a man named Theodore Johnson who started with UPS in 1924. Evidently, he worked hard, moved his way up in the company but he never made more than $14,000 a year but he set aside 20% of every paycheck he received and he saved every Christmas bonus and he put it into UPS stock, UPS for United Parcel Service.

The delivery company and he just always did it and over time with the growth of UPS stock, evidently his stock account had grown in value to over $70 million by the time he was 90 years old. Now, at that point in time, it's a little late to enjoy it.

I hope he enjoyed it but maybe for him, leaving $70 million behind to a worthy cause was his definition of enjoyment. That wouldn't necessarily be my definition of enjoyment but I hope it worked for him and I hope so. But what an amazing story and evidently it does say that at the end of his life, he donated over $36 million to different educational causes.

He made $3.6 million in grants to two schools for the deaf because he'd been hard of hearing for many years. He set up a college scholarship fund for UPS for the children of employees. How awesome. And maybe I'm sure he got far more enjoyment from that than from spending it.

But you see in that story, the themes that are important in financial planning. Am I saving some percentage of my income? He set aside 20% and every Christmas bonus. Am I investing it wisely? And then am I giving it enough time for it to compound over time? He gave a story of a lady named Osceola McCarty who washed and ironed clothes and never made much money at all.

She washed and ironed clothes but she always saved. And she donated at 87 years old, she donated $150,000 to the University of Southern Mississippi. Now what's heartbreaking for a financial advisor is she donated $150,000 because it seems that from the story that she never invested it. And you think, man, how much more if she had invested it?

But how incredible for that lady who from Mississippi washing and ironing clothes to accumulate $150,000. Amazing. Talks about John Templeton who is one of my favorite investment managers. Just seems like an amazing guy. And starting with nothing, he committed and saved 50% of his income from the beginning when he was a brand new stockbroker in New York City around the time of World War II.

Amazing. Interesting tidbit. A couple of interesting tidbits for you on John Templeton. I'm fascinated by Templeton. He did a couple of things. First, he saw the opportunity and he saved 50% of what he earned. So he had set aside a lot of money. And then in World War II, when he looks around and says, "Man, everything is going crazy," he pulled together $10,000.

And some of it he borrowed, some of it he had. But he pulled together $10,000 and he bought 100 shares of every company that was trading under a dollar a share. Including those that were considered nearly bankrupt. So all he did was just simply set this arbitrary price limit of this very low valuation and invested into it.

And then after the war, when the economy grew, it grew quickly to be a much larger portfolio. If memory is correct, I think only three of his stocks wound up going bankrupt. All the rest of them made money and came back. I wish I had had, I think, back to 2008 and unfortunately I was a dumb-dumb and I didn't have enough money pulled together.

And also I was in the process of starting a business. Maybe I wasn't a dumb-dumb, but I wish I had been more diligent when I was younger to save more money, save more capital to put in at that point in time. And I hope that, you know, for you older people are not going to like this, but for me as a young guy, I hope desperately that we wind up in another situation like 2008.

I missed it. And just because I didn't have the capital set aside, I was ready to invest. And I was, I missed it. But next time I'll be ready. Next time, next time. But the cool thing about Templeton, another interesting tidbit that I noticed in the book that you might be interested in also is that Templeton was originally American.

But in the book it says he was a British citizen. You often hear him referred to as Sir John Templeton. And I wondered why he was a British citizen because it was clear he was from the United States of America. He was originally American. Well, I went and researched it.

And according to Wikipedia, he actually renounced his citizenship in 1964 and became a naturalized British citizen living in the Bahamas. And according to the Wikipedia entry, he saved about a hundred million bucks in taxes by doing that, which he was then able to move that money and devote it towards philanthropy.

According to some articles that I read, this happened because there was a 1962 change in the tax code which regulated the tax deferral of income in a controlled foreign corporation. It seems like he had originally set up his funds in Canada and he was a US citizen. But when they changed that tax code, then that really affected him.

That law and the tax code, that really affected him. So he renounced the city of citizenship. So I say good for him. That's awesome. It's a subject I'm interested in, in this need to find people who have done it effectively and successfully over the years and saved a lot of money.

And when I look forward at some of the tax uncertainty and some of the capital controls that you sometimes wonder if the stage is being paved for them with changes, I'm not sold yet, but I look at it suspiciously. Researching expatriation and renunciation of citizenship is a part-time hobby of mine.

So neat little story on Templeton. But the point is Templeton saved 50% of his income and he turned it into a multi-billion dollar portfolio. A really amazing achievement. Robbins does a really amazing job of talking about some cool behavior tricks. And I learned something new called the Save More Tomorrow idea.

And let me read you one paragraph here from page 67. And paragraph says, "Bernard C. and Thaler first tested the Save More Tomorrow plan almost 20 years ago at a company in the Midwest, where the blue-collar workers said they couldn't afford to squeeze another dime out of their paychecks.

But the researchers persuaded them to let their employer automatically divert 3% of their salaries into a retirement account, and then add 3% more every time they got a pay raise. The results were amazing. After just five years and three pay raises, those employees who thought they couldn't afford to save were setting aside just under a whopping 14% of their paychecks.

And 65% of them were actually saving an average of 19% of their salaries." So the Save More Tomorrow idea was that, I didn't know it had been tested. I had read some of the literature saying, "Hey, this is effective." But I didn't know it had been tested with results like that.

But how neat that just basically the idea is, commit to saving more in the future. Don't do anything today, but commit to saving more in the future. So as your income goes up, or even if it doesn't, you just say, "Well, I'm going to save a little bit, little by little by little." I've used this with clients.

And I would encourage you to consider it in your life. If you're not saving any money, say, "I'm going to save 1% and then increase it by 1% every month." Or start with something laughably low, maybe half a percent, go to half a percent every month. What that'll happen is you can find those little tweaks and those little tricks.

And if you commit to yourself that I'm always going to save this amount of money, and then you do it, and then you work to figure it out, that slow, easy easing in can really lead to much stronger long-term results than many times saying, "I'm going to go from nothing to 30%." Now, I think both are doable.

Some people respond well to the go from nothing to 30%. That's kind of my personality. I get a little frustrated if things are slow. But many people have noticed it's effective if you do that. Now, the trick is you've got to set up some kind of system for actually doing that.

And I guess these systems are actually being tested with some of the 401(k) companies, which Robbins talks about later in the book, which I think is really neat. I would love to have an option like that myself because you can just sign it up and do it. And I think that should be really rolled out more and more.

Should be optional, but it should be rolled out more and more. Robbins does a great job of also talking about the emotional needs and the connection with emotional needs versus financial issues. Some people try to meet their emotional needs with money. And this is classic Tony Robbins. He talks about the first need that we have is a need for certainty.

A sense of certainty and for comfort. But the second most important need we have is a need for uncertainty and variety. So, both of these things are necessary. Too much certainty, you get bored. Too much uncertainty, you get stressed and you can't handle it. Talks about the need for significance, the need for love and connection, the need for growth and the need for contribution.

And money is often tried to be applied to those certain emotional needs. The need for significance is probably the easiest one where people try to measure their significance by displaying their wealth. I've got the fanciest car. I've got the biggest house. I've got the nicest diamond ring. Or on the flip side, you see people just try to display their significance by not displaying their wealth.

I'm worth $10 million, but I drive a $2,000 car. And the key that I drew from this section was, if you can fix emotional problems, then a lot of times the financial problems are relatively simple. But if you can't fix the emotional problems, no matter how fancy your financial problem, excuse me, no matter how fancy your financial solution, it's not going to work.

And I've seen this happen with some of the financial plans that I've designed have fallen apart for clients. And it wasn't due to a mistake that I made in a technical sense. It was due to a mistake I made in not perceiving the emotional needs. So I'm glad he brought that in.

Robbins does a great job of talking about topics comprehensively and then giving some practical advice and some useful tricks. I really appreciate it. In his section on how to speed up your financial results, he talks about some different strategies. And I'm going to spend a little time here because this is really practical as far as things that you can do to speed up your strategies.

Now, remember, put this in the context of the framework that I use and that I talk about constantly. I can focus on income. I can focus on expenses and the difference between those. And I can focus on investing the difference intelligently and getting higher rates of return on the difference.

And again, I may have, I think I made that up in my mind, but I may have stolen it from somewhere. But you see that same theme in his different strategies. Here he lists three strategies. Strategy one is to save more and invest the difference. And some practical things, he goes through a little idea on saving money on mortgage payments.

The idea that do on your mortgage, if you're interested in paying off your mortgage more quickly, make pocket change pre-payments. The idea is instead of making big payments, just make little payments. And the key one is to pay your next month's principal payment. And I love this idea. I actually did this idea on my mortgage.

I did this myself on my mortgage for the first, for the first, let's see, was it a year of living in this house. And every month I would run down the amortization schedule and I would try to pay my normal monthly payment and then at least the next month's principal payment.

And then some months I would do several months. But instead of sending $1,000, I would calculate, well, one month is $232, the next month is $247, and the next month is $280. And I would add those three things together and I would send a check for whatever that number was, $867, so that I could keep my amortization schedule nice and cute and clean.

And I just thought it was a fun idea and I liked it. And I was trying to balance this idea of invest versus pay off the mortgage and the emotional need, especially for my family, of having the mortgage paid off and investing. So I was just saying, well, this is, I'm making progress in the right direction without committing to say, I'm gonna get this mortgage paid off and primarily doing investing.

When I decided to start the show, I stopped doing that. But I love that idea and I commend it to you. Run your amortization schedule, figure out where you are, and then just make a little extra payment. And then try to make that also, is my idea, try to make it out of money that you would otherwise be spending on consumption.

And maybe that'll give you a little psychological trick that'll help yourself. It goes to the practicality of getting rid of the BMW and getting a better car, going through all your expenses, looking at the latte factor, David Bach's idea from "The Automatic Millionaire." Look for that daily consumption that you're doing on an ongoing basis and figure out how to adjust that.

One of the best solutions that I found that I also commend to you is a way of essentially applying the idea of the latte factor to higher consumption clients. And this is something I've really struggled with in my financial planning practice of how do I connect with my clients who are more lifestyle oriented and not so worried about saving little things.

They like living a nice lifestyle. They like their fancy house. They like their fancy cars. They like their fancy clothes. They like eating out constantly. And so the ultra thrifty, ultra frugal people will say, "Well, I gotta get rid of that." How do I help them to still save money?

So I love this trick. Quote from page 255, one paragraph here. He says, "I'm not saying you have to give up bottled water or stop getting coffee, but the savings are there somewhere. Isn't it time to find them? Don't forget about our impulse purchases, you know, the ones that feel great in the moment, like the pricey work bag or the beautiful Hermes tie.

Lisa, a young mom from Nashville, has a taste for the finer things in life. She drives her husband batty with her impulse purchases. She'll come home with a great new dress or an amazing pair of boots and her husband will invariably ask, "Were they on sale?" Or, "Did you check online to see if you could get them cheaper?" After several spats, Lisa and her husband agreed on a new plan.

When Lisa found herself unexpectedly at Saks Fifth Avenue or Jimmy Choo, she'd take a photo of her next must-have and send it to her husband. He had two weeks to find her a better price online. Otherwise, she'd order her purchase over the phone at full retail. But, as Lisa sheepishly admitted to me, over 80% of the time, he did find whatever she was looking for and often at 20 or 30% cheaper.

So I thought that was a really neat idea. And I'm gonna use that idea. I commend it to you. If you are in a marriage relationship where you struggle with, you know, "I have a spouse who's a compulsive spender. What do I do?" And you can combine it with this idea.

You can combine both finding better deals online, things like that, or you can also combine this with essentially putting a time limit on your desire to lower some of those impulse purchases. So that's an idea that I'm gonna share with clients in the future for those clients that, you know, stop drinking at Starbucks.

This simply doesn't work for 'em 'cause that can really matter. And again, the key about this, which I mentioned a few minutes ago, it's not about lifestyle. It's about timing. Quote from page 256, "Why not make simple changes today to ensure that you have more than enough down the road to continue to fund your lifestyle and your dreams?

You can still enjoy life's finer pleasures, but you're in control now. You get to choose how to allocate your funds and where to put the biggest bang for your buck. That's the key." He does a great job continuing on this theme of strategies in earn more and invest the difference.

So the first strategy to speed things up was save more and invest the difference by lowering expenses. Now you flip it over to the earn more and invest the difference. And I'm gonna read you a page and a half from page 260 where he talks about his story when he was a young man and he talks about going to a Jim Rohn seminar.

And I'm gonna do this in my Jim Rohn voice because Jim Rohn was a master at conveying simple concepts. But this page and a half excerpt here from page 260 is incredibly, incredibly valuable. And for those of you who are Jim Rohn fans, I'm gonna try to do my Jim Rohn voice here.

Quote, "I became obsessed." This is Robin speaking about how when he looked around and saw some people struggling, "Why is my family struggling to stay ahead of the bill collector when other people are making loads of money? Other people are doing well. What's going on?" "I became obsessed. How was it possible that someone could earn twice as much money in the same amount of time?

Three times as much, 10 times as much. It seemed crazy. From my perspective, it was an unsolvable riddle. I was working as a janitor and I needed extra money. A man my parents knew and whom my father had called a loser had become quite successful in a short period of time, well, at least in financial terms.

He was buying, fixing, and flipping real estate in Southern California, and he needed a kid on the weekend to help him move furniture. That chance encounter, that fateful weekend of working my tail off, led to an opening that would change my life forever. His name was Jim Hanna. He took notice of my hustle and drive.

When I had a moment, I asked him, "How did you turn your life around? How did you become so successful?" Interrupt the story here. Pay attention. He took notice of my hustle and drive. I've gotten, I think, two jobs off of just simply my hustle and drive. I was with some friends at an event recently, and we were noticing just some people that were moving some things.

I was thinking, "I would never in my life"— I knew the person— "I would never in my life offer this person work because I cannot stand how they are approaching this moving opportunity." Teach your kids to move quickly and to hustle, and opportunities come. So, Robbins is asking this man named Jim, "How did you become so successful?" "I did it," Jim said, "by going to a seminar by a man named Jim Rohn." "What's a seminar?" I asked.

"It's a place where a man takes 10 or 20 years of his life and all he's learned, and he condenses it into a few hours so that you can compress years of learning into days," he answered. "Wow, that sounded pretty awesome. How much does it cost?" "$35," he told me.

"What? I was making $40 a week as a part-time janitor while going to high school." "Can you get me in?" I asked. "Sure," he said, "but I won't, because you wouldn't value it if you didn't pay for it." I stood there disheartened. "How could I ever afford $35 for three hours with this expert?" "Well, if you don't think you're worth the investment, don't make it," he finally shrugged.

I struggled and struggled with that one, but ultimately decided to go for it. It turned out to be one of the most important investments of my life. I took a week's pay and went to a seminar where I met Jim Rohn, the man who became my life's first mentor.

I sat in an Irvine, California hotel ballroom listening to Jim, riveted. This silver-haired man literally echoed the questions that had been burning in my mind. He, too, had grown up poor, wondering, even though his father was a good man, why his father struggled so hard only to suffer while others around him prospered.

And then suddenly he answered the question I had been asking myself literally for years. "What's the secret to economic success?" "The key," he said, "is to understand how to become more valuable in the marketplace. To have more, you simply have to become more. Don't wish it were easier. Wish you were better.

For things to change, you have to change. For things to get better, you have to get better. We get paid for bringing value to the marketplace. It takes time, but we don't get paid for time. We get paid for value. America is unique. It's a ladder to climb. It starts down here at, what, about $2.30 an hour?

This was many years before current minimum wage days. What was the top income last year? The guy who runs Disney, $52 million. Would a company pay somebody $52 million a year? The answer is, of course. If you help a company make a billion dollars, would they pay you $52 million?

Of course. It's chicken feed. It's not that much money. Is it really possible to become that valuable? The answer is, of course. And then he let me in on the ultimate secret. How do you truly become more valuable? Learn to work harder on yourself than you do on your job.

So, can you personally become twice as valuable and make twice as much money in the same time? Is it possible to become 10 times as valuable and make 10 times as much money in the same time? Is that possible? Of course. And then he paused and looked directly in my eyes and said, "All you have to do to earn more money in the same amount of time is simply become more valuable." And there it was.

There was my answer. Once I got that, it turned my life around. That clarity, that simplicity, the wisdom of those words, they hit me like a 100-pound brick. Those are the exact words I've heard Jim Rohn speak probably a hundred times. I've carried them in my heart every day since, including the day that I spoke at his funeral in 2009.

That man, that seminar, that day, what Jim Rohn did was put me back in control of my own future. He made me stop focusing on what was outside of my control, my past, the poverty, other people's expectations, the state of the economy, and taught me to focus instead on what I could control.

I could improve myself. I could find a way to serve, a way to do more, a way to become better, a way to add value to the marketplace. I became obsessed with finding ways to do more for others than anyone else was doing in less time. That began a never-ending process that continues to this day.

At its most basic level, it provided a pathway to progress that continues to drive and lead every single decision I make and action I take. In the Bible, there is a simple tenet that says there's nothing wrong with wanting to be great. If you wish to become great, learn to become the servant of many.

If you can find a way to serve many people, you can earn more. Find a way to serve millions of people, you can earn millions. It's the law of added value. And if the gospel of Warren Buffett is more your thing than biblical verse, the oracle of Omaha is famous for saying that the most powerful investment he ever made in his life and that anyone can make is an investment in himself.

He talks about investing in personal development books, in educating himself, and how a Dale Carnegie course completely changed his life. Buffett once told me this story himself when we were on the Today Show together. I laughed and asked him to keep telling that story. "It's good for business," I said, grinning.

I took Jim Rohn's message to heart and became obsessed. I would never stop growing, never stop giving, never stop trying to expand my influence or my capacity to give and do good. And as a result, over the years, I've become more valuable in the marketplace to the point that I'm extremely fortunate enough today that finances are no longer an issue in my life.

I'm not unique. Anyone can do the same. If you let go of your stories about the past and break through your stories about the present and its limits, problems are always available. But so is opportunity. To me, that was more than a page and a half. Those two and a half pages are worth the price of admission.

Just those two pages, in my mind, lay out the formula that somebody needs to go on to become wealthy. I know for me, ever since I heard Jim Rohn say that, I think he was the first, I've thought a lot about that. How do I become more valuable? How do I become more valuable?

How do I become more valuable? How do I become more valuable? And in my mind, at least in the system that I live in, in the United States of America, that's the key. If I can become more valuable, I can earn more. So instead of saying, "How can I?" The only way to answer the question, "How can I earn more?

How can I get paid more? How can I have more?" is, "I need to become more valuable. I need to grow and expand and learn and develop." Interestingly, he puts in a little box here updating those numbers. This is also, I want to read this to you from page 263.

"What does the American income ladder look like today? My bet is Jim Rohn couldn't have imagined that in 2013, the low end of the ladder would be $7.25 an hour, $15,080 annually, and that the high end earner of the year would be Appaloosa Management founder and hedge fund leader, David Tepper, who earned $3.5 billion, with a B, billion, in personal income.

How could any human being make even $1 billion a year, much less $3.5 billion? Why such an incredibly low income for some people and such a high income opportunity for others? The answer is the marketplace puts very little value on being a cashier at McDonald's, $7.77 an hour, because it requires a skill that can be learned in a few hours by almost anyone.

However, successfully expanding people's financial returns in a significant way is a much more rare and valued set of skills. When most Americans are getting less than 33 basis points, a third of 1%, annually, as a return on their money from the bank, David Tepper delivered a 42% return for his investors in the same time.

How valuable were his contributions to their economic lives? If he got them a 1% return, he would have been 300% more valuable. A 42% return means he added 12,627% more economic value to their lives. That's the formula, right? That's what's so frustrating to me, why I hammer so much on the school thing, is because if you're making $7.77 an hour at McDonald's today, you're going to be replaced in under five years with a touchscreen, and you're going to go from $7.77 to nothing.

If you're taking orders and if you're flipping burgers in the back of McDonald's, you're going to be replaced in under five years by a robot. The person out front pushes the touchscreen and says, "I want a Big Mac," and the machine's going to make it, and it's going to be perfect every time.

Now, that machine may cost $100,000, $200,000, it doesn't matter. Compare that to $15,080 per year, plus cost of employment taxes, plus cost of insurance, plus the hassle of dealing with management, managing employees. That's going to be the change. In a world where we're already accustomed to going in and simply interacting with machines, where sometimes many of us prefer not doing our own self-checkouts, we don't have to talk to anybody, we're becoming sensitized to interacting with machines over time.

What does the minimum wage earner do? We've crippled many of the people at minimum wage. We've crippled them with schooling. Rant over. The point is that that is the key. Earn more in yourself. Amazing, amazing. Another key stat that I learned from this section was on the next page, page 264, and about the importance of that skill set, and especially as it relates to things like unemployment.

Think about what a big difference some of your friends, maybe some of you listening, who've been unemployed for a year, two years, three years, and 2008. What a massive setback that was to your financial plans, or is to your financial plans. I told the story on shows past about my client who had gotten laid off from a job and just took two years of unemployment, and then wound up not being able to find a job, and was stuck not being able to find a job, and wound up pulling tons of money out of their 401k.

Now consider this paragraph from page 264. During the Great Recession, 8.8 million jobs were lost. In 2008, 2.3 million jobs were lost in that year alone. Unemployment peaked at 10%, but remember that 10% unemployment rate is an average. Some portions of the population had unemployment levels over 25%, but for those making $100,000 per year or more, what would you guess was their unemployment rate?

The answer, close to 1%. The lesson, if you truly develop skills that are needed in the current marketplace, if you constantly improve and become more valuable, someone will employ you, or you'll employ yourself regardless of the economy. If you employ yourself, your raise becomes effective when you are. Isn't that stunning?

1% unemployment for those making a nexus of $100,000 a year, average of 10%, as much as 25% in some sectors. We're living in a time of this incredible reshuffling and transformation of our economy, and it's going to have massive impact. Massive impact. Got to be aware of it. The key is self-development and getting the situation where we're earning in excess of $100,000 and learn the skills.

Tells a story, Robbins does, that blew my mind about a Korean teacher who is earning $4 million a year as a teacher. It's a man named Kim Kihun, and he saw an opportunity doing online education. He was a teacher and he said, "I can do this better online." Today, it says on page 267, he works about 60 hours a week, but only three hours are for giving lectures.

The other 57 hours are spent researching, innovating, developing curriculum, and responding to students. He charges his students based upon an hourly fee for their instruction. Based upon this hourly fee for their instruction, he wound up earning $4 million last year. Students log on for $4 an hour to watch his classes.

Isn't that stunning? Here's a teacher, $4 an hour for each student, but he's so effective at teaching that he earned more than $4 million. Amazing. He tells a story on the next page, 268, about a lady named Daniela who was working in a marketing department doing art design. She's working in a company.

She was doing other people's jobs. They were being lazy. Basically, she went to her CEO and said, "Listen, I'm doing the work of four people. I know what I'm talking about. I've gone to courses. I've learned. I've taught myself about visual arts, marketing, and social media. I'm not going to throw any of the other employees under the bus, but I can save you 50% of your marketing costs right now and eliminate three people by taking on their jobs myself, and I'll do a better job.

Don't trust me. Let me prove it. Let me do their jobs for the next six months, and I'll do my assignments and theirs, and you can have two different examples to pick from, and you decide what's best." She did it. She proved herself, and she made a lot more money over time.

Isn't that cool? Isn't that a strategy that many of you could do if you're working in a company? Pick up the responsibility. I remember Brian Tracy always taught in his courses, he would always teach, "Ask for more responsibility. Ask for more responsibility. Do the responsibility well. Discharge it and ask for more responsibility.

Ask for more responsibility." It's a useful thing that can be applied if you're trying to figure out, "How do I earn more?" Look at it from that perspective. Tell us a story about GoPro. I didn't know the story of GoPro. It's fascinating to me. Evidently, it was started by a man named Nick Woodman, who was a surfer, and he just started toying around with making waterproof cameras.

Today, GoPro, I mean, the guy's worth over a billion bucks because he found this niche in digital cameras and created the GoPros, and they have executed on the idea phenomenally well, but an amazing financial success story. He also tells the story that I thought was fascinating about a lady named Sarah Blakely, who is the world's youngest female self-made billionaire, and she invented Spanx, control-top pantyhose.

One of the things that I thought was interesting, he profiled in the book on page 271, that he says here, "Sarah shared with me that one of the most important secrets to her success was that from an early age, her father actually encouraged her to fail, but he defined failure not as failure to achieve a result, but failure to try.

Around the dinner table, he would ask if she had failed today, and he was truly excited if she had because he knew that meant she was on the path to success. 'Tony, it just took away my fear of trying,' she told me. Down and out in a dead-end office product sales job, Blakely infested all the money she had in the world, $5,000, and set out to create body wear that would work for her.

'I must have heard no a thousand times,' she said, but she didn't listen. In addition to the $5,000 she invested, she saved $3,000, which she didn't have, on legal fees by writing her own patent from a textbook. And Spanx went on, 'Today it's worth over a billion dollars,'" and they have over 200 products, including, I guess they're developing a product for men.

That's my weak point. I wonder if I'll have to check out the Spanx and suck my tummy in with control top pantyhose for men. Just kidding, sort of. So, amazing. I noticed that because, as you know, I think a lot about education, and I think a lot about the incentive system for failure.

And what I don't like is that every great inventor, every great entrepreneur talks that I've read, many great inventors, entrepreneurs talk about the value of failure, but we've set up an incentive system for children that incentivizes them not to fail and penalizes them for failure. Now, there's a difference between defining failure as getting a C.

If you're capable of getting a C and you get a C, that's a success. But I think a lot about how can we clarify the incentive system for children to incentivize them to try, to try new things. And you don't get incentivized to try and measure the way that the current schooling system works.

Strategy three that Robbins talks about is a way to speed things up, which is reduce fees and taxes and invest the difference. And so, this ultimately is all part of my number two thing, cut expenses. Anytime you can lower fees and lower taxes, you're cutting expenses, and that's going to improve your situation.

And tax efficiency is one of the, in Robbins' book here, it's one of the most direct ways to shorten the time it takes to get from where you are now to where you want to be financially. He talks a little bit about his personal tax story. He says that if you're in a high income or in a high income state, such as California, where he used to live, your total tax bill is 62% by the time you bring in all of the taxes for income, investment taxes, payroll taxes, the new Obamacare taxes, and social security.

He does a good job of going into the long-term capital gains rates versus the short-term capital gains rates, just a really effective job of talking about how the major, major impact that reducing taxes and fees can have on how quickly you can achieve your financial results. I'll mention this later when I talk about lifestyle, but one of the things that Robbins did was he moved from California to Florida recently and saved a massive amount on taxes just by eliminating the California state income tax.

I'm going to give you details on that when we get to the, in a moment, or it's not going to be in a moment, but later when I talk about his emphasis on lifestyle. He's so, so valuable. Let's do it now. One of the things that just, to me, I really love that he talks about lifestyle first.

I really think that in many ways, lifestyle should be the first place to start. He mentions it towards the end of his book, but I think you should start by designing the ideal lifestyle. That means many things. It means living in an ideal scenario and an ideal place. If you want to live in the mountains, go live in the mountains.

Don't wait for retirement. If you want to live in the warmth, come live in Florida. We've got plenty of jobs down here. Build the lifestyle for yourself first because ultimately money is only good to fund lifestyle. So if you can create lifestyle without having money to fund it from investments, just go do that first.

But then also build the lifestyle in a way that's going to be effective. And so with that tax efficiency, he talks on page 287 of his book, he goes through the details of how he was born and raised a Californian and had lived there for years, even though he traveled most of the time.

But California in 2012 raised taxes on the highest income earners by more than 30% to a top rate of 13.3%. And so his effective tax rate had shot up to 62 cents for every $100 that he earned. He was left with $38 after taxes. And worst of all, they made that tax retroactive.

So after they passed it, after they passed the bill, they made it go back all the way up to that same year or to the prior year. I'm not sure which it was. So they changed the rules after the fact. And so for him, finally, it convinced him to do something else.

So he went on a massive search all around the country to find different options. And he came to Florida, right where I live, right to Palm Beach. And I used to walk across Palm Beach Island every day to, you know, not every day, but to go to the beach when I was in college.

He came to Florida and said, "Oh, okay, I only know Florida, alligators and old people." But what he found was Palm Beach. And so from page 289, after looking at 88 properties in three states in just three weeks, I told you I'm a massive action guy, we found the only brand new home on the water in Palm Beach.

Two acres, nearly 200 feet of ocean frontage on one side and the Atlantic intercoastal waterway on the other, with a 50 foot boat dock. I feel like I'm back in my home in Fiji. It's extraordinary. My wife has everything she wants close by, world-class restaurants, et cetera, et cetera, et cetera.

Of course, the price tag was way higher than I ever wanted or imagined paying for a home. But Florida has no state income tax. We went from 13.3% state income tax in California to nothing, nada, zip. So here's the kicker. With the state taxes we're saving every year, we are literally paying off our entire new home in six years.

Did you catch that? We're paying for our entire home out of the tax savings we now get as residents of the sunshine state instead of the golden state. Kind of makes you think we should have done it sooner, huh? Better late than never. And he goes on and says we massively improved our quality of life with that change as well.

And one of the coolest resources that I'll commend to you is a website I had never heard of. And I love the theme of the website. It's called howmoneywalks.com. I love this theme and I'd never heard of this site. So I'm really glad I found it. howmoneywalks.com is a site that is using the IRS data that the IRS tracks as far as where people move from and move to.

And it talks about basically where people are moving from and to, and where the money is flowing out of and where the money is flowing into. And the most interesting thing is you can go in and you can identify your specific situation. Sorry about that. My dog barked. You can identify your specific situation and you can say, "Hey, if I made this move from here to there, what will that do for me?" I just think this is the coolest thing.

And the best thing about it, he's got an app. So look it up in the app store that you can use. And evidently he's written a book as well. But he's got an option where you can put in, "If I move from here to there, how much money would it save me?" So I made up a number and I said, "Okay, let's say I move from Chicago, Illinois to Florida." And I pretended I said a 29 year old person married, filing jointly with two dependents making $100,000 a year.

If you moved from Chicago, Illinois to Florida, you would save $4,590 per year. If that $4,590 is then invested each year at 6% interest until you retire at the age of 67, you would have an additional $623,800 net worth. Isn't that incredible? This has got to be one of the best tools ever for showing you, "Hey, here can I save?" And I hear from many of you who say, "I actually went and did my cashflow statement based upon how you told me to do it.

And so when I did it, I found out that I was spending all this money on taxes." Yes, you can do it. Now, do I expect everyone to move? No, of course not. But if you have a company that you can move, if you have an ability to earn income from other places, if you have a job that you can clearly move from and easily move from, this should definitely be on the consideration.

And the good thing is that everybody wins. Number one, you win by doing something that's in your best interest. Number two is that by voting with your feet and moving, the place where you go gets better as long as you're a productive person, and you probably are, otherwise you wouldn't be moving.

And then by voting with your feet and getting out of there, the other place wakes up and says, "Hey, I need to change something. This is competition." Doesn't usually exist in government circles, but in this situation, it might exist in some. So the Detroit government, after everyone left and everyone goes bankrupt, has had to restructure things.

So that's good. Clear out a bunch of debt, go bankrupt, reset everything. Now new people come in, new innovation comes in, people move there for different reasons. Just apply that on a macro scale. So there's really one of the few ways that reform can happen in this country is by moving.

So I thought that was just an awesome scenario. I think Tony does a good job of treating financial advisors fairly. And this is always an interesting conundrum. Oftentimes when I come to books like this, I have this internal bias because I come from the financial industry. And just like I feel so bad for people who are car dealers that you get so hammered on for, "Wow, you're a used car salesman," you kind of build up this defense mode.

And I have family members who are car dealers, and I'm in the financial world. No attorneys in my family, though. But you get used to this defense mode. So I find that constantly affects me, even though I don't identify with much of the financial industry and how it works.

Oftentimes when the financial industry is being criticized, I often get really upset about that. Not upset, but I have to deal with it. I have a bias that I have to deal with. And so he's clear about this. I think he treats advisors fairly. On page 86, we read, "Now let me be clear.

This book is not another Bash Wall Street book. Many of the large financial institutions have pioneered some extraordinary products that we will explore and advocate throughout this book. And the vast majority of people in the financial services industry care intensely for their clients. And more often than not, they're doing what they believe to be the best thing.

Unfortunately, many don't also understand how the house reaps profits, whether the client wins or not. They're doing the best they can for their clients with the knowledge, training, and the tools, products, they have been provided. But the system isn't set up for your broker to have endless options and complete autonomy in finding what's best for you.

And this could prove costly." I think that's accurate. I really do. I think that's accurate. So he clearly, throughout the book, illustrates the need for financial advisors in a number of different ways, ways that I've talked about and also just directly simply saying it. One of the things that I've grew to love as a financial advisor is the primary basis upon which I would bring on board an investment client was on the basis of what Nick Murray calls the behavioral investment counseling option.

I believe one of the most valuable services that an advisor can provide for their client is helping the client to optimize and optimize their general behavior through good financial planning and then also to mitigate their destructive behavior of dealing with certain market gyrations, essentially. On page 96, you see this where he quotes the Dalbar returns comparing the returns of the average mutual fund versus the average investment fund.

So over a 20-year period, December 31, 1993 through December 31, 2013, the S&P 500 returned an average annual return of 9.28%. But the average mutual fund investor made just over 2.54%, according to Dalbar, one of the leading industry research firms. So this is a major, major problem that I think financial advisors can help with.

He also does a good job of talking about the importance of asset allocation, which in my mind is one of the key scenarios that a good financial advisor should be working with people is helping them to figure out and identify their asset allocation and just the necessity of doing that carefully with asset allocation.

It's a big, big deal. And so if you can combine asset allocation, which he makes the point in the book that is free return with behavioral investment counseling, to use Nick Murray's words, to me that is tremendous. And this page 336 here, he talks about the value of advice.

"Some people just won't listen to advice. They have to learn the hard way, if at all. But to avoid those kinds of painful lessons and to help you decide which options are right for you, I have to remind you that a conflict-free, independent investment manager can be the right choice.

Notice how professional athletes, men and women at the top of their sport always have coaches to keep them at peak performance. Why is that? Because a coach will notice when their game is off and can help them make small adjustments that can result in huge payoffs. The same thing applies to your finances.

Great fiduciary advisors will keep you on course when you're starting to act like a teenager and chasing returns. They can talk you off the ledge when you're about to make a fateful investment decision." So really, really powerful. On the next page, he talks about a quote from the leader of J.P.

Morgan, one of the financial divisions at J.P. Morgan, a lady named Mary Callahan Erdos, or Erdos, I'm not sure. And so in building out an asset allocation, he identifies, in my mind, the power of a financial advisor. Let me read to you these four paragraphs. "When I interviewed J.P.

Morgan's Mary Callahan Erdos, I asked her, 'What criteria would you use in building an asset allocation? And if you have to build one for your kids, what would that look like?' 'I have three daughters,' she told me. 'They're three different ages. They have three different skill sets, and those are going to change over time, and I'm not going to know what they are.

One might spend more money than another. One may want to work in an environment where she can earn a lot of money. Another may be more philanthropic in nature. One may have something that happens in her life, a health issue. One may get married. One may not. One may have children.

One may not. Every single permutation will vary over time, which is why even if I started all of them the first day they were born and set out an asset allocation, it would have to change. And that has to change based on their risk profile, because over time you can't have someone in a perfect asset allocation unless it's perfect for them.

And if at the end of the day, someone comes to me and says, 'All I want is treasury bills to sleep well at night,' that may be the best answer for them." I said to her, "Because it's about meeting their emotional needs, right? It's not about the money in the end." "Exactly, Tony," she said, "because if I cause more stress by taking half their portfolio and putting it in a stock market, but that leads to a deterioration of the happiness in their lives, why am I doing that?" "What is the purpose of investing?" I asked.

"Isn't it about making sure that we have that economic freedom for ourselves and for our families?" "That's right. To be able to do the things you want to do," she said, "but not at the expense of the stress, the strains, and the discomfort that goes along with a bad market environment." "So what's the lesson here from one of the best financial minds in the world?

What's more important, even the building wealth is doing it in a way that will give you peace of mind." In my mind, that's one of the key values of a financial advisor. So I think he's very, very fair in dealing about that. He also clearly in the book, another major benefit of the book, he does a great job of clearly discussing the need for setting the price on the dreams, on your dreams.

And in my mind, this book is worth it for this chapter alone, because this is what people don't do, and I'd encourage you to do it. And as he says, you may find that the price tag is less than you ever imagined. Let me read you one example here, to kick this one off, from page 203.

He says, "I usually kick off my financial seminars with a question, 'What's the price of your dreams?' Then I invite people to stand up and tell me what it's going to take for them to be financially secure, independent, or free. Most don't have a clue." So he goes on to ask, and I ask you now as Robbins asks in the book, "What's the price of your dreams?

Do you know the price, the actual price tag?" This one really made me think, because I realized that I need to update my price tags on my dreams. I have a list, and they have price tags, but I realized I need to update them. And what most people do is they write down a number of some kind, and then he talks about, they write down a number, and it's a big number, and it's kind of scary, they don't know what to do with it.

They don't know what it means. On the next page, he says, "Recently at one of my high-end programs, a young man in the back of the room stood up to name the price of his dreams. He threw back his shoulders and announced, 'A billion dollars.'" There were a lot of oohs and ahs from the crowd.

This person was in his 20s, one of the younger participants at the conference, and he probably hadn't earned his first million yet. So I asked him to consider what that number really meant. Robbins goes on and talks about how what was driving him was significance, the idea of having a billion dollars, that if he had a billion dollars, if he was a billionaire, then he would matter, he would be significant.

People would recognize that. But as far as how to actually work with him, Robbins went on and talked to him and said, "Well, what kind of lifestyle would you live?" The man says, "I'd like to have a Gulfstream jet, a jet that I can really fly around the world in." Let me just read this.

It says on page 206, "I started by asking my young friend what his lifestyle would be like if he had a billion dollars. He thought for a moment, then he said, 'I'd have my own Gulfstream.'" "Your own jet," I said, "where will you fly to?" He said, "Well, I live in New York.

I'd probably fly down to the Bahamas and I'd probably fly to LA for some meetings." I had him write down how many times he'd fly in a year and he figured it was probably a maximum of 12 flights. And how much would a jet cost him? We looked it up and a long distance Gulfstream G650 would cost him about $65 million.

A slightly used Gulfstream IV would only set him back about $10 million, not including fuel, maintenance, and crew. Then we looked up the costs of chartering a private jet instead of owning one. A mid-sized jet was all he really needed for himself and three family members to fly and that's around $2,500 an hour.

He would be flying for maybe 100 hours a year for a grand total of $250,000 per year or around $5,000 per hour or $500,000 per year if he wanted to fly by a Gulfstream on every flight. Still far less than the annual price of maintenance on many jets and at a cost that would be less than 1% of the cost of buying that Gulfstream.

Even from the stage I could see his eyes lighting up and his mind working. He goes on and says, "What else would you buy? Buy an island." Robbins tells the story of buying his own island and worked through the list and looked up the cost and figured out he could buy an island or he could just rent Richard Branson's Necker Island for $350,000 for a week.

That comes with a staff of 50 people to take care of everything and host all of his friends there. If he did that every year for a decade, it would only cost $3.5 million versus $30 to $40 million needed to buy an island with no work to maintain the property.

We worked through his list, I'm on 2H208, and guess how much it would cost to have the lifestyle he wants to have for the rest of his life. When we added up the real cost of even his wildest dreams, not just his needs, it came to a grand total of not $1 billion, not $500 million, not $100 million, not $50 million, but $10 million to have everything he dreamed of having in his lifestyle and never have to work for pay for it.

His dreams were gigantic. The difference between $10 million and $1 billion is astronomical. These numbers exist in different universes. He goes on and talks about really big numbers. Pay attention to these two paragraphs, trying to compare the definition and the difference between millionaires and billionaires. My first question is, how long ago was 1 million seconds ago?

Take a moment, even if you don't know, what do you guess? The answer is 12 days ago. How close were you? Don't feel bad. Most people have no clue. If you got it, congratulations. Now we're going to up the ante. Since you now have a perspective of what a million is, a million seconds being 12 days ago, how long ago was a billion seconds ago?

Stay with me. Come on, make a guess. Commit to a number. The answer is 32 years ago. How close were you? For most people, they're pretty far off. That's the difference between being a millionaire and a billionaire. 12 days or 32 years. Do you see what I mean by saying they live in different universes?

You can never say millionaires and billionaires in the same breath and be talking about the same thing. Just to complete the thought, when you hear the US government has $17 trillion in debt, how much is a trillion? Well, if a billion seconds was 32 years ago, how long ago was a trillion seconds?

The answer, nearly 32,000 years ago. Big difference, huh? When you hear people talk about national debt figures and things like that, keep that in mind. Trillions are big numbers. Difference between a million, which you might have, and a billion, which you might have, and a trillion, which you don't have, is a big number.

The point is by actually defining a price tag for goals, you can achieve them because they're not so scary. I found this time after time myself in doing retirement planning. People say in retirement planning, "What are you going to do in retirement?" "I'm going to travel." Define travel. How many months a year are you going to be gone?

"Well, not a month, just two weeks, three weeks. I want to take a three-week trip to Europe." "Okay, you want to do that every six months?" "Well, no, just once." So your price tag is 5,000 bucks maybe, the high end. You could spend thousands, but I don't know. I could go to Europe for 1,000 bucks for three weeks, all included.

So you've got to figure out what's your price tag. What I love in this section, I mentioned it earlier, is his five steps. Let me go through them and I'm actually going to add my own. Let me start with his. He gives five dreams, basically, in five different numbers.

I think these things are useful to give to people. Look at the power of certain financial models. Look at Dave Ramsey's seven steps, seven baby steps. Look at how powerful that is to give people a clear organizing framework. Look at how powerful having a goal given to you can be.

Well, what I like about Robin's approach here is he gives these five dreams and he asks you to give price tags to them. So let me go through his first and then I'm going to add what I'm thinking about developing going forward. Number one, he says dream one is financial security.

What does security mean? He says it's these five things. Your home mortgage, for as long as you live, paid forever. You never have to work again to pay for your home. Number two, your utilities for the home, paid forever. You never have to work to pay for your phone bill or to keep the lights on.

Three, all the food for your family, paid forever. Four, your basic transportation needs. Five, your basic insurance costs, all of them paid for without you ever working another day in your life. And so for him, he goes and leads you through defining those things. You write down your mortgage payment, you write down your food costs, your utility costs, your transportation, your insurance costs, and figure out what that average is.

In the US, that average is about $34,668 a year according to Bogle. And so then flip out of that and just say, "Well, how much money would I need in a portfolio to fund that for the rest of my life?" And if we use, let's just use for sake of scenario, 25 times annual expenses, if that basic level for you at $34,650 times 25, that's $866,700 of savings.

Now, that's a lot of money, but it's not as much money as millions of dollars, and that's basic financial security. And he goes on and gives a couple of stories about how to create that number. His dream number two is financial vitality is what he calls it. And he says it's a mile marker on the path to financial independence and freedom.

And so he says, he figures out, he calculates it as all of those basic costs plus half of your current monthly clothing costs, half of your current monthly dining and entertainment costs, half of your current small indulgences or little indulgence or little luxury costs, and figure out what that additional level of income is.

Then dream three is financial independence. And so financial independence for him is the way he mentions that number is he goes with all of those other expenses plus whatever goals and ideas as far as the big money that you would want to spend on really your dreams or at least the dreams related to your current lifestyle.

Basically, he says, "What's your current lifestyle? Let's fund that," with the assumption that most people are spending more than the basic expenses. So financial independence is funding current lifestyle. Step four is financial freedom. And so financial freedom means you're independent, you have everything you have today plus two or three significant luxuries that you want in the future.

So this might be things like a vacation condo. In the example here, he talks about a person that he was advising that wanted to give $100,000 a year to their church and also have a condo in Steamboat Springs. And so figuring out that number for financial freedom. And then his fifth dream is absolute financial freedom.

And he talks about what is the absolute, all of the dreams that you possibly have, no matter what. You can own, you can rent the jet, so you can have the jet lifestyle without having to own it. You can own part of the sports team. What are all of your dreams and figuring out the total number and targeting that number.

And so in the example, he got somebody that wound up, the person wound up needing $673,000 a year. And you can figure that out with payment. So here's where I'm going to expand on this concept. I love this idea of the five models. And Robbins in the book here says, "At most, pick three, pick three numbers.

How are you going to keep five numbers in your head?" What I don't like about this is that he starts with financial security. And financial security to him, that first number, that first goal is the idea of having all the money and investments to pay for your basic living expenses, housing, utilities, food, transportation, and insurance.

But that's still a big number. That's $600,000, $700,000, $800,000. My thought is, I wonder if we could develop this with some additional numbers. So the first thing I thought was, step one could be financial solvency. So applying the idea of the power of setting out clear steps, I've wondered if we could develop a model that would say, "Step one is financial solvency.

And I define this as current on all of your bills." If you look at Dave Ramsey's seven baby steps system, he said, "The first thing is get current on your bills. Then step one is save a thousand bucks, I think." So step one is financial solvency. And I would say, "Get current on all of your bills." Maybe you could add in a preset, a pre-step.

I mean, you could get ridiculous with this. But the idea is if you're counseling a 16-year-old young man or woman that is trying to say, "What are my goals?" Well, maybe that would be a goal. Maybe step two could be financial stability. So you're current on all of your bills, plus you have an emergency fund of a certain size, six months of expenses, something like that.

Maybe the next step would be debt freedom or consumer debt freedom. We've paid off all consumer debt to give a nod toward the power of paying off consumer debt and then build up into partial financial security. This is just my ideas I'm trying to figure out. If you have any ideas on that subject of how you would name that, I'd love to hear them.

Comment on today's show and let me know. If not, what I would encourage you is set out your own set of goals. So for example, on my personal financial plan, my goal ultimately is to be able to provide for the lifestyle of my family at a comfortable level without needing to work, with being able to pay that off of investments.

I think that as far as for us, what a comfortable level would be something like, I don't know, somewhere on the order of like six grand a month. I'm a pretty simple guy. I can fund most of my luxuries on $6,000 a month. So that means when I actually run the math for me, that means about 1.8 million bucks.

Now at the moment, we spend somewhere between three to four on a monthly basis, depending on what we're doing. So that's also part of my scenario is, let's just say $36,000 times 25, that's about $900,000. So there are some luxuries that I think we would enjoy spending at the higher level that we don't currently do.

I can imagine a few things that would be fun to do. So that's why for me, that $6,000 number is pretty luxurious. I don't want to move. I don't want to live in a house on the water. I don't want to drive a new car, but I would like to buy an RV.

So some things like that, that's where that difference is. So for me, the kind of a baseline is the $900,000 number. But on my financial plan personally, one of my earlier goals is to get this show to a point where it can actually fund my basic lifestyle and then my ideal lifestyle, with the idea being that I'll fund the basic lifestyle at $3,000 a month off the show.

I'll grow it up to be $6,000. I'll save 50%. Anywhere beyond the three, basically three to $4,000 a month that we spend, everything beyond that is going to savings. And then all of that money that's going to savings is going to build the portfolio. And then once I hit the $3,000 number in passive income at that point in time, then ideally we'll start to increase our lifestyle after we've started with that financial, well, Robbins calls it financial security.

I call it financial independence. So make up these ideas for yourself. I thought this was really powerful and I loved his five models. I thought it was a super useful idea. And I can see how I can expand on this and expand on this for yourself. Everyone's ideas are going to be different.

But in my mind, the key is make the celebrations come more quickly, but make them in the direction that you want to go. If you set off with absolute financial freedom, which is what many people do, if you're not already part of the way there, does that really meaningful?

Start with financial solvency. And I think if we add a couple of steps, then maybe we can help someone cross the gap and know that we're going to absolute financial freedom, but work on financial solvency first. So I share those ideas with you. I hope they're useful to you.

One of the other things that I really thought was excellent about this book and really interesting was the portfolios. And in the book, Robbins talks a lot about different portfolios, and there are three that stand out. Within the context of the asset allocation discussion, he's constantly talking with different people and saying, "Well, how would you allocate your money?" And remember, most of the people he's talking with, or at least many of these billionaires, are billionaire hedge fund managers.

None of them are mutual fund managers. They're all hedge fund managers, which by the way, is its own show in and of itself as far as what's happening in the mutual fund market. But the first one that appears is on page 327. This is David Swenson's portfolio. David Swenson runs the Yale Endowment.

And so he's running a $24 billion portfolio for the Yale Endowment. And evidently, he's done an excellent job with that portfolio. Kind of bugs me a little bit, by the way, just as an aside, bugs me a little bit some of the attention some of these portfolio managers get when there are, you know, they're insurance companies that are managing $150 billion portfolios with incredible finesse and they don't seem to get much press.

But the Yale guy does. Now he's had good returns. But the point is, this is the guy that we're supposed to look for and say, "How would we allocate the money?" So he talks about, this is the portfolio selection that he recommends. 20% in domestic stock, 20% in international stock, 10% in emerging markets, 20% in real estate, real estate investment trusts, and 15% in long-term U.S.

treasuries, and 15% in TIPS, treasury inflation protected securities. When you run the numbers on it, it comes out to be 50% in stock, 20% in real estate REITs, and 30% in bonds. And this is an interesting portfolio because it's fairly straightforward, 50/50, 50% in equities, which is very interesting.

And then the bond portfolio is interesting to me because he splits it between long-term treasuries and TIPS, so treasury inflation protected securities. Without going into the details, essentially what he's trying to do here is he's splitting his bond portfolio out to try to make the connection between success in inflation or in deflation.

In inflation, in an inflationary environment, the TIPS protect your portfolio. In a deflationary environment, your treasuries protect your portfolio. So I thought that was interesting. 50% stocks, 20% real estate, 30% bonds, essentially. Robbins kind of glosses over that in favor, focusing primarily on something he calls the all-seasons portfolio, which is an offshoot of his interview with Ray Dalio.

And he's got a very interesting story behind this. Ray Dalio running a very successful, well-known fund called the All-Weather Portfolio, which has had some really impressive performance over time. And within the context of the discussion, he goes through and talks about how he was able to get Dalio to lay out for him the allocation that he recommends.

And I was not familiar previously with the All-Weather Portfolio. Portfolio management is not my bailiwick. So this is not something that I was really familiar with. But it was interesting to read about. And I do spend a little bit of time focusing on the fundamentals. And for those of you who I've done a show on the past on the permanent portfolio, which is an interesting strategy, I was struck by how similar this is to the permanent portfolio approach with a slight tweak.

What Dalio explains is that what makes his All-Weather Portfolio different than many others is that instead of basing his asset allocation decision on the different asset class on a set percentage, such as what Swenson said, where I put 50% in stocks, 20% in real estate, and 30% in bonds, Dalio says, "I'm developing my percentages based upon the volatility of returns." So as an example, if you were running a portfolio that was 50% stock and 50% bonds, even though that is "balanced" from the perspective of 50/50 with regard to the percentages, it's not balanced based upon the amount of risk, based upon the volatility of the portfolio.

And so what he does is he calculates the volatility of the stock portfolio, and he uses that to address what percentage should be allocated. So I'll go through his allocations in just a moment, but the other thing that struck me about his approach that Robbins relates Dalio's lesson in the book is that he's very much focused on the idea of the four different economic environments, which is what I originally learned when studying the permanent portfolio.

And so in summary, on page 386 of the book, Robbins lays this out for you. He says that there are only four things that move the price of assets. Number one, inflation. Number two, deflation. Number three, rising economic growth. And four, declining economic growth. So if you plot those things on a matrix, you can have your four different options.

Either we're going to have an inflationary growth environment, or we're going to have an inflationary declining environment, declining economic growth environment, or deflationary growth, or deflationary decline. So very interestingly, Ray's just simply saying, "I don't know what's going to happen." There's all kinds of story in the book, but Ray says, "I don't know what's going to happen, but I do know we're going to be in one of those scenarios." He also makes the interesting point that the key is not what's actually happening, but the key is whether or not it's expected.

So with investing, you often hear that, "Well, they had higher than expected earnings, so therefore that moved their stock price. We had lower than expected earnings, so therefore that moved their stock price." And in general, this is a scenario that the idea that the forecasters and the analysts in the world of investing have already priced into their model whatever they think their forecasts are.

So the price that they're willing to pay or not pay for an asset is based upon their expectations. And so that price is going to change when either expectations are not met or not met, either positively or negatively. So Dalio makes that point as well, which is very interesting.

Now in these four environments, we could have higher than expected. The expectation is the key. So we're either going to have higher than expected inflation and rising prices, or we're going to have lower than expected inflation or deflation. We're going to have higher than expected economic growth, and we're going to have lower than expected economic growth.

So Dalio builds the portfolio for that. And I'm often wondering when I try to wrap my head around investment topics, what works well in what scenario? On page 388, Robbins has a very useful chart. And the chart has four quadrants, and on the top is growth and inflation. So on the left two quadrants, we're dealing with are we in a period of higher than expected economic growth or in a period of lower than expected economic growth?

And then are we in a period of higher than expected inflation or are we in a period of lower than expected inflation? And he links the asset classes to these, which I always find very interesting. So in a period of higher than expected economic growth, that we did expect stocks, corporate bonds, and commodities and gold to do well.

In a period of lower than expected economic growth, we would expect treasury bonds, inflation-linked bonds, or TIPS to do well. In a period of higher than expected inflation, we would expect commodities and gold to do well, inflation-linked bonds, TIPS to do well. And in a period of lower than expected inflation, we would expect treasury bonds and stocks to do well.

So that's what he sticks in there. Then Dalio goes in and talks about how allocating risk. So he wants 25% of his risk in each of those quadrants, not necessarily just to match a 25% asset allocation based upon percentage. He wants 25% of the risk. So on that basis, Robbins in the narrative gets him to give the actual percentages.

And so here's what they are. Robbins makes clear in the book, and Dalio makes clear, this is not specifically his all-weather portfolio, because in his all-weather portfolio, he is using some fairly sophisticated portfolio management techniques. But this is pretty close, according to Robbins' book here. So his asset allocation, he puts 30% in stocks, 40% in long-term US bonds, 15% in intermediate US bonds, 7.5% in gold, and 7.5% in commodities.

It's very interesting. So I really enjoyed reading about that. And I learned something I'd never learned before. I'd never thought about the model of the idea of allocating risk. And so I'm going to have to give that some thought, because it does make a lot of sense to me.

I think it's very interesting. The other port—and I commend it to you. Again, the book is well worth the price, so buy it and read it. That section alone is fascinating. Where else? I mean, I'm not going to get—well, I guess I'd be a little short-sighted of me. At the moment, I don't think it's likely that next week I'm going to sit down with Ray Dalio and have the necessary clout to get him to talk to me about all those details that he may have talked with Robbins about.

Now, the other portfolio that was interesting was Mark Faber. He talks about his portfolio. And what struck me about Mark Faber—Mark Faber was a billionaire Swiss investor— is that Faber had focused—he's well-known for being a contrarian doom-and-gloom guy, which is—he's great. It was my favorite interview in the book with the profiles of the billionaires that he talked about.

He was my favorite. But he talked about that his portfolio—he used to focus it on 25% stocks, 25% gold, 25% cash and bonds, and 25% real estate. So I thought it was really interesting. Those of you who love the Porvino portfolio concept, you all will like these models. I was struck by how similar they all tend to be.

A couple other major lessons I learned from the book. I learned that the average American evidently spends $1,000 a year on the lottery. I couldn't believe that one. I searched and searched and searched to try to find the actual citation for that. But in the book, Robbins cited a professor, but he didn't cite an actual study, and there's no bibliography.

So I searched and searched to find that one. All of the numbers I found online about how much the average American spends are far lower than that, but maybe there was new research that the professor knew. I don't know. I learned—Robbins makes a big point about the greatest investors in the world finding an asymmetric risk-return ratio.

I'm going to talk a little bit about this again. But the best way to find an asymmetric risk-return ratio is in the world of investment management. I'm going to save this. I'm going to mention this when I get to talking through the investment manager. It's very fascinating to me.

One of the most compelling things I learned was about the power of a disempowering story. Pages 190, 191, Robbins talks about the stories that we tell ourselves and the impact that that has on our physical experience. He talks about various people, including Richard Branson, that had dyslexia, but they view dyslexia not as something that is an obstacle that is going to keep them from achieving something, but rather as an obstacle that they're going to have to work harder to overcome.

He cites some interesting research from a health psychologist at Stanford University named Kelly McGonigal, who talked about the dangers of stress for a long time. Then she wondered one day if it wasn't stress itself that was causing the problems, but rather how people viewed stress. A quote on page 191 says from her, "I'm converting a stimulus, stress, that could be strengthening people into a source of disease." So, it's actually the impact of the stress, not to the actual stress.

According to her research, it evidently is the research is now showing that when you change your mind about stress, you can actually change your body's reaction to it. The quote from page 191, "In an eight-year study, adults who experienced a 'lot of stress' and who believed stress was harmful to their health had a 43% increase in their risk of dying.

However, people who experienced an equal amount of stress but did not view stress as harmful were no more likely to die." McGonigal says that the physical signs of stress, a pounding heart, faster breathing, breaking out in a sweat, aren't necessarily physical evidence of anxiety or signs that we aren't coping well with pressure.

Instead, we can interpret them as indications that our body is energized and preparing us to meet the next challenge. So, the idea is it's not the stress itself that actually matters, but it's the story that you attach to stress. This made a big difference for me because I think a lot about how to interpret events.

I was raised with the privilege of basically confronting minor adversity from time to time and the opportunity to learn to control my attitude around something, and that's made a major difference in who I am. At a time of adversity, a miserable experience, so to speak, you go camping and it rains all weekend.

This is not something to be cried about. This is something to be laughed at. The story that I tell about a rainy weekend camping trip, I say, "Well, wow, we're going to have a fun story later and we can make a good experience of it." That's made a big difference in my life as far as my ability to interpret experiences into a more positive framing.

With Robin's book here, I think about this with regard to financial stress. Some people seem to fall apart under financial stress and some people seem to say, "Whatever, no big deal." Work stress, investment stress, certain things. I want to research this more and try to figure this out because it aligns with an agenda I'd like to see, which is basically the idea of empowering ourselves to take control of our circumstances.

I'm interested to research that a little bit more, but I really felt that was a valuable learning. I learned how to buy a tax deductible vacation property. I commend this to you. I thought it was a great idea. Robbins talks a little bit about his personal experience with buying a property in Fiji.

He talks about this in two places. Page 207, he writes this paragraph in the context of encouraging the young man who had said, "I need a billion dollars to accomplish my dreams." He writes this, "I own a small island paradise in the country of Fiji. It was a wild dream I had early in my life to find an escape someday where I could take my family and friends and live.

In my early 20s, I traveled to islands all over the world searching for my Shangri-La. When I arrived in Fiji, I found it, a place with not only magnificent beauty, but beautiful souls as well. I couldn't afford it at the time, but I bought a piece of a little backpacker resort with 125 acres on the island.

I really didn't have the money, and it probably wasn't the best investment at first, but it was part of what I call my dream bucket, something you'll learn about later in the book. Still, I made it happen, and I'm proud to say that over the years, I've purchased and converted it into a protected ecological preserve with over 500 acres of land and nearly three miles of ocean frontage.

I've turned Namale Resort and Spa into the number one resort in Fiji for the last decade, and it's consistently rated among the top 10 resorts in the South Pacific. But how often do I visit this paradise? With my crazy schedule, maybe four to six weeks a year. So my dream has come true.

Everybody else has a great time there. So I thought this was cool. If you want a tax-deductible vacation home, do it Tony Robbins way. Buy a resort, turn it into a business that makes you money, and there's not a chance in the world he pays when he's there. He gets to enjoy it and write all of the expenses associated with it off.

Now, maybe his accountant does pay something. I don't know that, but I just thought it was really interesting. And he talks about, on page 341, he talks about talking about the resort in Fiji. Now, over the years, Namale Resort and Spa has become a pretty sizable asset because I built it up and turned it into one of the top destinations in the South Pacific.

I share this with you because I have thought about this from my personal perspective, and I think this is a strategy that we could apply to our lives with smaller dollar figures. Remember earlier I also talked about Richard Branson. In that same section on islands, Robbins says, "Why don't you just go rent Richard Branson's Necker Island?

It's only $350,000 a week. No big deal, and it comes with the staff of 50 people to take care of you." And I thought, "Interesting." I didn't know you could rent Necker Island. I don't know. Maybe it's foolish of me. I just hadn't thought about it. But that's definitely the way to do it.

Many people do this already. You buy a cabin and you put it on the rent a cabin site, and you stay there when you want to. But I just commend you that you can do this at any scale, at the small scale and at the larger scale. And I think it's much smarter.

I've had so many people sit in my office and say, "Joshua, I want to buy a second house or a vacation home." And I just often wonder, "Why would you want that? Why would you want the hassle?" And if you do want it, go for it, but maybe consider at least making a little bit of money on it.

So to me, that makes a big, big difference. I have two favorite quotes that came out of the book that really made it, for me, were impactful. First quote comes from page 246, and it says this, "Most people overestimate what they can do in a year, and they massively underestimate what they can accomplish in a decade or two." The fact is you are not a manager of circumstance.

You're the architect of your life's experience. Just because something isn't in the foreground or isn't within striking distance, don't underestimate the power of the right actions taken relentlessly. That quote about overestimating what they can do in a year, that totally applies to me. Every year I set out much bigger goals than I ever accomplished.

But then I think I also probably do underestimate what I can accomplish in a decade or two. That really made me pay attention. I'm going to continue to think about that. Another quote from page 41 is a quote that says, "Complexity is the enemy of execution." This is something else that I struggle with because he's talking about why we should make investment choices simple.

He shares the idea that in different countries, the percentage of people that donate their organs varies greatly. In Germany, there's a one in eight chance you'll donate your organs. About 12% of the population does. But in Austria, 99% of people donate their organs. In Sweden, 89% donate. But in Denmark, the rate is only 4%.

So what's the difference? He goes on and shows that the difference is the way they ask the question. In Denmark, there's a small box that says, "Check here if you want to participate in the organ donor program." In other countries like Sweden, the form says, "Check here if you don't want to participate in the organ donor program." Nobody likes to check boxes.

In that context, he talks about complexity as the enemy of execution. I've often struggled with this as far as how to connect with people because I'm a very complex person in the sense of I often go to elaborate, complex solutions instead of simple ones. That's why, as you see when I dig into my critiques of this book, I get pretty complex.

I think this is oftentimes a problem for me. I'm going to write that one down. Remember, complexity is the enemy of execution. Ultimately, execution is what matters. I had to learn that with financial planning. Very simple. Help your clients take action. Make a simple step and lay it there and make it happen.

So I share that with you. Now, let's get into some flaws of the book. I'm sharing these with you not with the purpose of being mean to Tony Robbins, but with the purpose of trying to give you some information and also arm you with some critical thinking skills and show you how in many financial books, there are a lot of things that if you're not aware of them, they might just bumble past you.

So let's throw out a few minor ones real quick. I already mentioned I can't find the bibliography. This is a big deal because he cites a lot of stuff, but none of it is actually cited. He talks a lot about, "Okay, this study shows this." And I had to do some digging to show some studies because the first thing I do when someone cites a study is I let me go read it because it makes a big difference as far as how somebody...

It makes a big difference when you actually see the study and see the question that was listened to, which you'll get to in a moment. I'll show you one of those. And so go read the study. Don't trust when people cite something. Go read it. And if you can't...

A couple of these I couldn't find. I just had to read some articles. At least find several articles to corroborate yourself, but go read the actual study and then you'll find out, "Well, wait a second. This is not what this says at all." I assume this is just a clerical error.

In the book, he says it would be found on the website. Well, I've searched the website every which way I can think of. I cannot find a bibliography, so I assume it'll show up at some point. But it's a big problem. You've got to cite your stuff, and so that's one issue.

I have an issue with his use of the word "risk." This bothers me throughout, and you see this in almost in many investment books. They talk about risk, and they constantly refer to different types of risk, but call them all risk. And so there are so many different kinds of risk.

You've got on the one hand, you've got market risk, which is the risk of the value of your investments going up and down based upon the gyrations of the market. And on the other hand, you've got currency risk, which is the value of your investments going up and down based upon the fluctuations of the currency.

Those are two very different things. You cannot eliminate risk. All you can do is plan for different risks. So the problem is that by only using this word "risk," which I get is the most commonly used word. By only using the word "risk," we really wind up doing a disservice.

I try to use volatility when I'm talking about market risk. The idea that the value of the investments will go up and down on any given day, ran completely randomly. I use volatility for that, and there are many reasons for that, but it bugs me. Because a lot of times, he is presenting specific solutions for risk that only solve one kind of risk and open you up to completely different kinds of risk.

He talks about saving percentages, but he doesn't give any guidelines for how to figure out that percentage. He has an app, which I'll get to in detail in a few minutes, but that's a kind of a bug. In talking about things, he makes a big deal about the mutual ownership structure of Vanguard, but he doesn't once mention the mutual ownership structure of different insurance companies.

To me, this seems like a big deal, because Bogle modeled his fund company, to the best of my knowledge, on mutually owned insurance companies where there are no stockholders. That was what he modeled it on. The key is that there are still plenty of great opportunities in the mutual insurance company space for life insurance and annuities that he talks about, but he didn't really mention that small detail.

One of the most frustrating things that I'm tired of reading in financial books is the stupid rule number one with investing. I'm guilty of it myself. I have said this, "Rule number one of investing, don't lose money." This is the most frustrating advice in the history of... This is the most frustrating advice, period.

Listen to this paragraph from page 44055. He's using this to introduce the masters. This is chapter 6.0, "Meet the Masters." It says, "All of these financial legends share these four common obsessions." The first obsession is one, don't lose. "All of these masters, while driven to deliver extraordinary returns, are even more obsessed with making sure they don't lose money.

Even the world's greatest hedge fund managers, who you'd think would be comfortable taking huge risks, are actually laser-focused on protecting their downside. From Ray Dalio to Kyle Bass to Paul Tudor Jones, if you don't lose, you live to fight another day. As Paul Tudor Jones said, "I care deeply about making money.

I want to know I'm not losing it. The most important thing for me is that defense is 10 times more important than offense. You have to be very focused on the downside at all times." This statement comes from a guy who's made money for his clients for 28 consecutive years.

It's so simple, but I can't emphasize it enough. Why? If you lose 50%, it takes 100% to get back to where you started. That takes something you can never get back, time. Warren Buffett's Rule #1 of Investing, "Don't lose money." Rule #2, if you forget Rule #1, if you lose money, go back and see Rule #1 or whatever it is.

That's so frustrating because you don't know whether you're going to lose money. All you can do is take a calculated bet. Sometimes you'll be right and sometimes you'll be wrong. Do great investors lose money? Absolutely they do. Not a single one of these, and I find that it's not losing money.

Now, this paragraph is the most fair treatment because it talks about protect your downside. I don't have any credentials whatsoever to talk about what the actual advice that they're giving is and go over it and say how my idea is better. In my mind, it's useless to say, "Don't lose money." The key is, how can you make sure that if you do lose money, you're limiting your downside?

Because then that transitions you from a perspective of, "I can't lose money," to a perspective of, "If I do lose money, how can I protect my downside?" That's actually useful. It also bugs me when people talk about this mathematical idea that if you lose 50%, it takes 100% to get back to where you started.

This is absolutely true, but it's absolutely not. There's a whole chart in the book on this on page 401 with a whole chart of if you lose this percent, how much do you have to gain in order to break even? If you lose 20% of your portfolio, you have to gain 25% to break even.

If you lose 50%, you have to gain 100% to break even. If you lose 90%, you have to gain 900% to break even. Now, this is mathematically true if you're looking at a period of time. The problem is that in the real world, is this really how people think?

Usually, this one is trotted out and it's an important mathematical concept, but it's trotted out to say, "You can't lose money." The question would be, "Do you lose money and you don't have any loss that's ever going to come back, or do you have a temporary decrease in price while the value of the underlying asset has not changed?" Think about this with your house.

If I'm wrong, tell me I'm wrong and prove it to me, but this is just how I thought through this one because I used to be really flummoxed by it and say, "How does this work?" Think about your house. Let's say your house is worth $100,000 in 2008, then the house goes down in value by 40%.

Now, does there need to be a 67% increase in the value of the house in order for you to break even? Yes, mathematically, there does if you're measuring things on a year-over-year basis. If on January 1, 2009, your house is down by 40%, now to gain back the same value, it's got to go up by 67% on the flip side by January 1, 2010.

But that doesn't necessarily mean that it's just this impossibly difficult task. If your house was already undervalued based upon a larger macroeconomic trend of things going on in your city and you had gotten it for a good price, the key thing is what did you pay for and what are the underlying trends?

Focus on that. Is the value of the house there and your dealing with a temporary fluctuation in price? Because the problem is if you're always thinking about what's the fluctuation in price and I have to gain 67% back to make up my 40% loss, I don't think that serves very well.

I think it's better to think of what's the current price and then how do I limit my risk? Every one of these great investors has lost money. Warren Buffett lost a ton of money. What was it? Back in the late '90s when his stock portfolio started just plummeting as his investment style went out of favor.

He lost money. He was worth less money on paper. Now, did that affect what he actually did? No. Best of all, he didn't do a thing differently because it was only affecting the price. One of the concerns I have with this book is that a lot of times the logic seems incomplete to me.

Advice is given based upon a system of logic that is not actually taking into account all of the risks. Now, recognize again, you can't take it... These are, by the way, these are the minor flaws. You can't take into account all of the risk, but you can leave people with a false sense of security sometimes.

So, in the context on page 149, in the context of money myth number five, which money myth number five is entitled "Your Retirement is Just a 401k Away," which is essentially blasting away the idea that the 401k is a great plan that just is working awesome for everybody. Also, now he talks about unconventional wisdom of spending.

So, on page 149, he says, "If you haven't noticed, our government has a spending problem. Like an out-of-control teenager with a platinum Amex, Uncle Sam has racked up over $17.3 trillion in debt and close to $100 trillion in unfunded, not paid for yet, liabilities with Social Security and Medicare." I think that number is $220 trillion based upon Lawrence Kotlikoff's numbers, but we'll go with $100 trillion.

"So, do you think taxes will be higher or lower in the future? Did you know that following the Great Depression, the highest income tax bracket was over 90%? The truth is you can tax every wealthy individual and corporation at 100% of its income and profits and still fall way short of the government's promises." And by the way, he has a great video on that, which is really, really great.

I will post it in the show notes. "Conventional logic, as most CPAs will attest, is to maximize your 401k or IRA contributions for tax purposes because each dollar is deductible, which simply means that you don't have to pay tax on that dollar today, but will defer the tax to a later date.

But here's the problem. Nobody knows what tax rates are going to be in the future, and therefore you have no idea how much of your money will be left over to actually spend." Next page, he goes on and says, "If we pay taxes now, then whatever the harvest time is in the future, we'll be able to spend that tax-free." So, he's talking about this in the context of, "Okay, you need to go with an IRA because taxes are going to go up." The problem is the same risk exists that is going to make taxes go up, the same risk exists with IRAs.

On page 154, he says, "Should I convert my traditional IRA to a Roth IRA?" And says, "Some people cringe at the idea of paying tax today because they view it as their money. It's not. It's the government's. By paying the tax today, you are giving Uncle Sam his money back earlier, and by doing so, you're protecting yourself and your nest egg from taxes being higher in the future.

If you don't think taxes will be higher, you shouldn't convert. You have to decide, but all the evidence points to the hard fact that Washington will need more tax revenue, and the biggest well to dip into is the trillions in retirement accounts." The reason I read that is because specifically what he's trying to address is tax risk, and I'm not convinced that his solution makes a big difference.

Now, I would probably, if I, I would probably, I do think that the Roth accounts are a more valuable tool, and I think it would be more difficult for the rules to change on Roth accounts versus generalized accounts, but the tax risk still exists with Roth accounts. And maybe this is just me, maybe I'm being too nitpicky, but I really would love it if people would talk about that.

Later in the book, and the reason why I'm focusing on this, usually if it were just here, I wouldn't bring it up, but later in the book, he has two specific sections on life insurance, cash value life insurance being as an investment product, and annuity products, specifically fixed index annuities, and he makes a big deal out of the fact that the inside buildup of cash value and life insurance is protected from tax.

He also makes a big deal about the taxation of annuities. Those products face exactly the same problem of taxation changes. These are all, so he's keyed in, the same problem he's keyed in on with 401ks exists with those things. I'll use life insurance as an example. At the moment, as you have cash values that grow and accumulate inside of a life, inside of a cash value life insurance policy, so this would be a whole life policy, a universal life insurance policy, or variations thereof, that growth of those cash values is not currently subject to income tax as long as it stays inside of the life insurance policy.

When you take it out, if you don't take it out in the form of a loan, once you take out more than your basis, more than the money you've put into it, it will be taxed. If you take it out in the form of a loan, it's not taxed currently.

The problem is this is a tax expenditure, what the government calls a tax expenditure, and there are lists of these things. When I was in the life insurance business, every year, I would go to a company conference and hear what the lobbyists are doing. You go to the industry conferences, and there's a whole team of lobbyists.

Their job is to make sure that the expenditures, the so-called tax expenditure, for the buildup of cash value for life insurance policies stays exempt from the law. This is a big deal to insurance companies because it's a major advantage that they have. But it's not just that. There are many so-called tax expenditures.

Quick political rant. Does it drive you a little nuts when they say, "Okay, we're going to give you a so-called tax break, so we're going to call that a tax expenditure, that we're spending the tax money"? The language is all twisted. Anyway. What's the biggest one? Exclusion of employer contributions for medical insurance, premiums, and medical care.

Net exclusion of pension contributions and earnings. The deductibility of mortgage interest on owner-occupied homes is a tax exclusion. Accelerated depreciation of machinery and equipment is a tax expenditure. There are others as well. Deductibility of charitable contributions. Capital gains exclusions on home sales. All of these things are tax expenditures and all of them can change.

I might be making a bit of a mountain out of a molehill here, but my point is that if you're concerned about tax risk, I'm not sure that moving the money from a traditional 401(k) to a Roth 401(k) fixes that. It still doesn't solve the tax risk. The logic here is that you're trying to say, "How do we protect from tax risk?" I'm saying it doesn't really protect all that much.

Maybe a little bit, but not all that much. I was encouraged that Robbins would think outside the box. In Myth 7, he talks about annuities. I always thought annuities just were terrible, but now I understand that they're not. The problem is that he quickly draws polarizing benefits and he goes and he lambasts variable annuities.

Now, I would help him with the vast majority of variable annuity products that I've reviewed as far as their internal fees, but I wouldn't help him on this comprehensive statement. That's an issue for me. There's a lot of internal conflict in the book between these scenarios, depending on where he talks about expenses and says, "We've got to tear these apart," and where he says, "These are just some expenses and they're not that big a deal." I'm going to boogie past, actually.

I feel like this is dragging with my minor flaws. Let me get to the major flaws. One of my major concerns is that there is some financial sleight of hand that I don't think you'd see if you weren't paying attention. I don't like how—I am guilty of this. I have done this.

It's all a matter of framing, where you're trying to frame certain things and try to make comparisons. When you make an invalid comparison, I think it destroys your argument. Let me give you one of the ones that I think is completely egregious. Page 421, he is talking about how to create a certain amount of income.

This section is entitled, and he's comparing using an annuity strategy versus other investment options. The title of this section is called 2,750% More Income. He gives three bullet points. He's talking about a client who has a certain amount of money, has $500,000. He has three options to create income.

Number one, he could go to a bank and a CD would pay him 0.23%, or 23 basis points per year. This arrangement would give him $95.80 per month and a fully taxable income for a $500,000 deposit. That's a whopping $1,149 a year before taxes. Don't spend it all in one place.

Number two, bonds would pay him closer to 3% a year, or about $15,000 a year before taxes. But the risk that option would entail would be if interest rates rise. This would cause the value of his bonds, his principal, to shrink. Number three, Josh, which is Tony Robbins' son, showed him that a $500,000 deposit into an immediate lifetime income annuity as of today would pay him $2,725 per month, or $32,700 per year, guaranteed for life.

That's a 2,750% increase over CDs and a 118% increase over bonds without their risk. Now, do you see the flaws in this comparison? The biggest one is that you have a complete apples and oranges comparison. The annuity gets rid of the $500,000 of principal, and the CD and the bonds do not.

For examples one and two, he's living off of the income without invading principal. And with option three, the reason why the difference is there is because he's spending the $500,000 principal. That's it. Now, should he spend the principal? He may or he may not, but you cannot use those things.

That's utterly dishonest. It's either dishonest or a total mistake. But that's a completely invalid comparison. What I would say is, well, he could do nothing. He could take the $500,000, he could decide he's going to spend it over 20 years, and he could take $25,000 off every single year.

That's what he's done with the annuity. To me, that's unconscionable. That should not exist. That is not a valid comparison, especially when being used to sell an annuity. I think annuities can be really useful, but that is not a valid comparison. So that one probably bothered me more than most of the other ones.

The other things about that that bothers me, check out these little things. Number one, those aren't his only options. He could buy an index fund from Jack Bogle. He could put together a portfolio based upon Dalio's all-seasons portfolio that Robbins goes through. Now, I get that he spent a whole book.

He can't list all of these examples, but that is not a valid comparison whatsoever to compare only getting 23 basis points of interest on a CD versus buying an immediate income annuity. He may only be getting, I don't know, 300 basis points on the annuity. Who knows? We can't know without knowing his age.

Okay, 65. So I could figure that out, but I didn't do it in preparation for the show. So point being, not a valid comparison. The other issue is as far as taxes. So Robbins makes some serious mistakes in here in taxes. So in that first part, this arrangement would give him $95.80 per month in fully taxable income for a $500,000 deposit.

Then in the next part about the annuity, there's a footnote that says about the taxable amount of the annuity. "The effective tax on income from immediate annuities is dependent on what the IRS calls the exclusion ratio. A portion of your income payments are deemed a return of your principal and thus excluded from tax.

The taxation from an annuity and a CD are identical. All of the income from the annuity is taxable income to him, and all of the basis is not taxable income." And it's the same thing with the CD. It's just that with the CD, the only thing that he's being reported because he's not invading principal with the CD is the interest income.

So by talking about the fully taxable income, it's talking as though there's some difference. There is no difference. They're taxed exactly the same just with annuities we call them exclusion ratios. This taxation issue is throughout the whole... it's everywhere. Page 427, one more very cool thing. "The IRS looks very favorably on these deferred income annuities, so you don't have to pay tax on the entire income payment because a good chunk of the payment is considered a return of your original deposit." So A, it's nothing special about these deferred income annuities.

That's all annuities. They're all taxed identically. You have what's called an exclusion ratio, which is the basis that you have in the contract, the amount that you put in, is returned to you with no tax. And then the growth on it is returned to you as tax. It's the same.

And the thing is, the tax principle is the same as every investment. If you buy an investment house for $200,000 and you sell it for $225,000, guess what? A portion of that is returned to you without tax because it's deemed to be a return of your original deposit. That's the tax principle.

So there's tax issues all throughout it. I also don't like how Robbins frames fees and things differently depending on the context. On page 439, when answering some frequently asked questions on annuity fees, after an entire chapter up front tearing apart actively managed mutual funds for their "egregious" fees, quote-unquote, he didn't use the word "egregious." It was characterized as being egregious.

He says, "However, if you select the guaranteed lifetime income, the annual fee for this ranges between 0.75% and 1.25% annually, depending on each company's individual offerings." Now, I recognize this is at the end of an FAQ section, but this is the whole issue that many of us have with fixed index annuities is the fees.

And so he spends the whole first part of the book tearing apart fees and then just tax it in, "Oh, it's no big deal, just 0.75% to 1.25%. That one really bugs me. But I could forgive that if it weren't other ones. Here's the big one that in my mind I think is really, really bad.

Page 445 is talking about tax-free compounding. And this one is coming in the context not of an annuity discussion, but actually in the context of life insurance. And I was glad to see this in here because life insurance often gets short shrift in financial planning discussions because people don't understand it, they don't get it, it just gets, it's not often accurately presented.

But here's the section here, and let me read this to you. "Tax-free compounding, illustrating the benefits of life insurance. Compounded over time, the advantage of private placement life insurance is astounding. Let's look at an example of how the identical investment compares when wrapped inside of private placement life insurance versus taking the standard approach of paying tax each year.

Let's take a healthy male, age 45, and assume he makes four annual deposits of $250,000 for a total contribution of $1 million over four years. If he makes a 10% return and has to pay tax each and every year, after 40 years his total account balance will be $7 million." Not bad, right?

"But if he wraps the investment within private placement life insurance and pays a relatively small amount for the cost of insurance, his ending balance or cash value is just over $30 million. Same investment strategy, but he is left with more than four times or 400% as much money for him and his family simply by using the tax code to his advantage." Please note that there are very strict rules around the investment management, it's supposed to be done by a third party investment professional, not the policy owner.

By the way, this same powerful advantage applies even to smaller investment amounts. This is compounding without taxes. But then I wanted to know, what about when I want to access my money? So it goes into how to take money out of a life insurance policy. So I don't know about you, but that math just strikes me as a little bit strange.

So we're going to deal with a 10% return and we're going to talk about the difference between $7 million and $30 million. So I went and calculated the returns. And let me first, I want to teach you how to do this, because this is important. Don't let people throw numbers at you without the ability to sit down and run your calculator and figure this out.

So what I wanted to do is figure out the rate of return. This is a more complicated rate of return to figure out because of the little twist that the healthy male age 45, assuming he makes four annual deposits of $250,000 for a total contribution of $1 million over four years.

By the way, the reason there has to be four instead of he can just simply say he invests a million dollars is because you need to get the life insurance policy to not be a modified endowment contract, which is its own complicated set of rules. But that's why this is written that way and why he didn't just say we need to put in a million dollars and run the math on that.

But if he had said put in a million dollars, that would be simple. So the first thing you can do is run the numbers on this to say, okay, I've got a million dollars and I make a 10% return for 40 years and figure out how we get to the $7 million number.

So keep this very simple and don't do it technically correct. Do it the simple way that you should be able to do. If you've listened to any, if you know how to run it, this is the basics of a time value calculation of money. Very simple. So clear your calculator, put in 40 as the end, put in $1 million, change the sign to a negative.

So you're going to put a negative $1 million for your present value, put in zero for your payments, and then put in $7 million, keep it as positive now as future value and solve for the interest. So if you solve for the interest and you do that simple calculation, you will get 4.98% interest.

So that gives you, now this isn't exactly what the calculation said, but it'll give you 4.98%. Then if you want to compare that to the $30 million, put in the $30 million number and put that in as your future value and then solve again for the interest. So now with your ending value being $30 million, the same time period, what is your investment rate of return?

And the answer is 8.875%. So that should make your eyebrows raise. The difference between 4.95% and 8.875%, that's a big deal. That's all you need to know to know you've got a major problem with this math. And I'll explain the problem in just a second. But what you can actually do is, let me teach you how to do this accurately.

Instead of using the NIPV payment and future value function, you're going to use the cash flow function. And so I use an HP 12C. What you're going to punch in with the cash flow function is you're going to punch in this four-year scenario. This is too complicated for me to teach it this way.

I'll skip the keystrokes except to say you're going to use the little CFO and the little CFJ function. And then you're going to use the internal rate of return calculation function. So what you do is you put in zero for your starting cash flow of zero. Then you put in the four years of payments of $250,000 as a cash flow into the portfolio.

Then put in 40 years of no cash flows into the portfolio. And then put in the ending cash flow out of the portfolio. And then solve for your internal rate of return. If you'll do that, what you find is that the internal rate of return on the $7 million number is 4.68%.

And the internal rate of return on the $30 million number is 8.32%. That's a big difference. Who in their right mind pays that amount in tax on an investment portfolio? And so my issue with this is having sold life insurance and understanding life insurance and seeing the value of life insurance, the thing that drives me nuts is when people oversell life insurance.

That is not the scenario that you can face. Man, if you're paying that kind of tax, especially after three whole chapters on the tax efficiency of index funds and the tax efficiency of long-term capital gains taxes, for crying out loud, go find a new financial planner. No one is paying that much tax on investments.

Maybe they're paying that much tax on income, but not on investments. So that kind of basically almost a doubling from 4.68% to 8.32%, almost double. You're saying you're paying a 50% tax rate on investments when your dividends and capital gains rate taxes are 15% and 20%. It's just not a valid comparison in any way.

But that's being used to make the point to say you should be doing everything within the context of life insurance. Life insurance has its place. That's not an accurate assessment. Had a managing director that used to say to me, "It's good enough without overselling it. Don't oversell it." So that's a problem.

That's a real problem for me. And the average person is not going to see that. And so you're misinforming people. And I think we've got to be careful with that. And especially it's up to us in the financial planning community to do... It's up to us to accurately discuss this stuff.

It really is. The tax treatment in this book was really a weak point. Page 244, last example here, is talking about a lady he knows named Angela who is having income and is saying she has an income amount. The amount she accumulates because she's going to use an investment account that using real estate and investing in senior housing that's paying a 7% income and dividend payment.

The amount she accumulates will generate $16,000 of income, assuming a 7% income payment. And she won't have to tap into her principal unless she wants to. One last huge benefit, Angela doesn't have to pay income tax on the entire income payment due to the tax deductions for depreciation. So this is just an example.

And this one, again, if it weren't for that one that I just went over, I would probably skip criticizing the tax stuff. But this is a big deal on real estate. When you depreciate the property, you will pay the tax when you sell, unless you roll the property over into another property using a like-kind exchange and avoid it through another mechanism such as a step-up and basis of death.

And that's a deal for another show. But the point is, real estate doesn't magically give you tax-free money. You have a loss called depreciation on the value of your property that you do. Now, real estate does, is beneficial. Again, I would skip that one if it weren't for the other stuff.

So that's a major issue I have. My bet is that Robinson is using examples. But he's a smart guy. Is that sleight of hand or is that, I don't know. I wrote several times in the margin, that's a little bit loose with the numbers. Another concern I have is that in the language that he says in the book, and you'll often see this, and this is what we do in the investment business, is you talk about, we change language when it's convenient for the point that we're making.

I'm guilty of this. I do this myself. But the problem is in a book, we shouldn't be doing this when we're teaching people about this. Example here, page 435 in the context of annuities. Listen to this language. We're getting the upside without the downside because it's all about fixed index annuities.

Well, the insurance, how do we, so the upside without the downside. You participate in 100% of the stock market index growth. That's right. 100% of the upside with no downside, no chance of loss, and no cap on your winnings. The insurance company simply shares in your profits by taking a small spread ranging between 1.25% to 1.75%.

If the market is up 10% and it keeps 1.5%, you get 8.5% credited to your account value. Now, in fairness, I'm going to read the next sentence. Conversely, if the market is down on a given year, the insurance company does not keep anything and you don't lose a dime or pay any fees.

You pay the spread only if you make money. That second part I read is important because that would be the point Robbins would make probably if I were questioning him directly. But here's the issue. If he hadn't started with a whole bunch of chapters on how active mutual fund management is a scourge of the earth, I would probably be more receptive.

But when you just start with that and try to rip apart the investment industry, and then suss in, "Well, the company keeps a small spread on your money ranging between 1.25% to 1.75%, he devoted entire chapters to telling me how that was a massive spread, and it is. He's right, which is why I don't at the moment like this annuity product at all because of that small spread.

I would rather put that small spread back in your pocket." Now, if the market is down, the rebuttal to that argument would be, "If the market is down on a given year, the insurance company doesn't keep anything, and you don't lose a dime or pay any fees, you pay the spread only if you make money." So the argument is that, well, you're actually getting a service.

I think it's a bogus argument, but it does have its place in some scenarios. So I don't like how the language is changed to prove a point. Another example here, page 447, in the context of talking about life insurance, he starts by talking about private placement life insurance, which are policies that are sold to qualified investors who basically have some unique investment opportunities wrapped up in a life insurance wrapper.

So on page 447, in order to access PPLI, you must be what's called an accredited investor, and the typical minimum annual deposits are $250,000 for a minimum of four years. True. However, there is a version of PPLI that is now available to non-accredited investors with as little as a few thousand to invest.

Unless I don't have a clue what I'm talking about, there's no version of PPLI. It's just called life insurance. Private placement life insurance is a version of life insurance. There's no subversion of private placement life insurance that has now been magically made available to non-accredited investors. It's just life insurance.

Call it what it is. Don't dance around it. It's a life insurance policy. It's a whole life insurance policy, but it's well designed. It has good fees. That's what makes it great and what makes it different. So to me, that's a big deal. And then other places in here, there's logical fallacies such as the argument from the extreme.

On page 297, he's talking about diversification. And the two best examples of reasons to diversify, I'm going to skip that one. We're already two and a half hours and I have one I know is going to be long because I'm going to explain to you a lot of context on it.

I wish also that authors when they're writing books would explain some of the history and evolution of the investment business. It's really a problem when people don't accurately explain the evolution and the growth of the investment business. In the beginning, he spends quite a few pages talking about investing and talking about active management and passive management and the growth of it over time.

And the issue is that there's no even nod given to the historical context of how index funds and index fund strategies came around. Active funds make index funds possible. The fact that we have a generally efficient market and we have lots of investors chasing returns, that's what makes index funds possible.

Now, I love index funds. I think they're an awesome investment. But at the time, mutual funds were an amazing innovation. And a lot of people, a lot of investors through mutual funds have become very wealthy by investing through mutual funds. And they serve, in my opinion, they serve the public incredibly well because they allow the public to get access to a low cost, fully diversified portfolio with a professional investment manager.

That's the historical context. Now, in that historical context, out of that came the growth of the passive index fund idea. I mean, index funds didn't exist until Jack Bogle launched Vanguard in 1974. Mutual funds are governed and they existed before this, but they're governed by the Investment Company Act of 1934.

So there's a major growth that happened over time of that history. And there's an ongoing struggle in the book is this struggle between active and passive investing. And it's a struggle in the book because it's a struggle in real life. But I'm not sure that it's dealt with very well in the book.

I haven't found a book that I felt was dealt with it effectively. Usually it's very, the books are very polarized instead of including the advantages of both of them. So that's just one of the things I wish authors like him would do, would be to talk a little bit about the history and evolution of the investment business.

Now, we live in a very different world in 2014 than we did in, you know, than existed in 1984. And the market has responded to that. Vanguard is doing amazingly well, has more market share than, I mean, it's just, it's incredible. So the market has responded to that. But I just wish some focus, some attention were given to the history a little bit.

There's a lot of little statements tossed in through the book that have a lot of emotional appeal, but they don't have any grounding in fact, or if they do, they're not cited. And that bothers me because they're strong statements. And if they're not proven, then I need to know.

Example from page 85, "Money Power Principle One, Don't get in the game unless you know the rules. Millions of investors worldwide are systematically marketed a set of myths, investment lies that guide their decision-making. This quote, conventional wisdom is often designed to keep you in the dark. When it comes to your money, what you don't know can and likely will hurt you.

Ignorance is not bliss. Ignorance is pain. Ignorance is struggle. Ignorance is giving your fortune away to someone who hasn't earned it. If conventional wisdom is designed to keep me in the dark, I need to know about that." So, I assume what he's referring to here is to the nine myths, but I don't see any design in that, and that's just, that's troublesome to me because if that's the case, I want some, I need to know that because I'm talking to a lot of people on the show, so I need to be able to know that so I can warn you.

There are others as well, but that's enough for now. One of the issues also that I have is oftentimes there are numbers in here that are misused or miscited, and the context of different numbers is, it bothers me. Page 94, he quotes, he says, "There are 7,707 different mutual funds in the United States, but only 4,900 individual stocks, all vying for a chance to help you beat the market." This is in the context of basically trying to say that 96% of active managers fail to beat the market, which I think is true.

But the problem is that that's a little bit misleading. So I went to check those numbers, and I said, "Okay, there's 7,707 different mutual funds." So I went and looked up and tried to figure out, well, let's fact check this and see how many mutual funds there are. I had actually recently fact-checked this for another project, so I knew right where to go.

And you can pull open, and I'll link to it in the show notes, the Investment Company Institute, which is one of the industry organizations for the investment world. So go to the Investment Company Institute fact book, and you can find the most recent one. The 2014 Investment Company Fact Book lists the number of investment companies by type.

And so here in 2013, you can read that there were 8,000, so this is entitled, the chart is entitled, "Number of Investment Companies by Type." And this is actually an important distinction, which I'll get to in a minute. So first, Robin's statement is there are 7,707 different mutual funds in the United States, but only 4,900 individual stocks, all vying for a chance to help you beat the market.

In 2013, there were 8,974 total open-end mutual funds. Open-end investment companies is technically what they would be called. We commonly refer to them as mutual funds, but they're open-ended investment companies. So I don't know where he got his 7,707 number, because it doesn't line up with what I was able to find, and there's no bibliography, so I couldn't find that.

But more importantly, there are more investment companies than that. There are 599 closed-end funds. There are 1,332 exchange-traded funds, and there were 5,552 unit investment trusts for a total of 16,457 different investment companies. So that's one thing. But the other thing is the comparison to 4,900 individual stocks. Now, it is true, there are only about 5,000 individual stocks that are listed on the U.S.

stock market. But what we don't know is how many of these funds are stock funds and how many are bond funds. And when you compare the size of the bond market to the size of the stock market, there is a massive, massive difference. Massive difference. There are 20 times more...

Just stick with municipal bonds. There are 20 times as many municipal bond issuers as there are companies, stocks. There are about 100,000 municipal bond issuers in the United States of America, and there are over 2 million different municipal bond securities. So you can see... Sorry about that, my dog again.

You can see that in the context, when you actually compare it to $2 million, there's a big difference here. Excuse me, not $2 million. Two million bond individual municipal securities, that makes a big difference. Now, what's the actual number? I don't know. But I do know that I don't trust that comparison to try to set the idea that I don't trust that comparison.

Is it wrong? It's not necessarily wrong. I don't like it. One of the ones that I also had an issue with that... And I just wish people would tighten up their books when they write about stuff like this. I know that they're writing for a lay audience, but anyway, this is my review of it.

One of the things that I have an issue with is also some statements. So Robbins repeats this study throughout the book. He says, and I'll cite it from page 127, this paragraph here. The paragraph is entitled, "Not all advice is good advice." And we're about to go into this fiduciary versus suitability thing in a minute.

"Aligning yourself with a fiduciary is, by all accounts, a great place to start. But this does not necessarily mean that the professional you select is going to provide good or even fairly priced advice. And like any industry, not all professionals have equal skill or experience. In fact, 46% of financial planners have no retirement plan." That's right.

The cobbler's kid has no shoes. "Over 2,400 financial planners were surveyed anonymously in a 2013 study by the Financial Planning Association, and close to half don't practice what they preach." Heck, I can't believe they admitted it. "Truth is, we're living in uncharted territory with endless complexity, central banks printing money like crazy, and even some governments defaulting on their own debt.

Only the elite advisors of the planning industry know how to navigate these waters." I don't disagree with them on the elite advisors part. But that's kind of a shocking statistic that 46% of financial planners have no retirement plan. Now, this one was actually fairly easy to find. Again, no bibliography, but this one was fairly easy to find.

So I went and found it, and it was the Financial Planning Association. I will link it in the show notes. So I went and read the study on page seven. The question that was asked, "Question. Do you have a clear plan in place for your own retirement?" 54% of respondents said yes, and 46% of respondents said no.

It goes on and says, "When do you plan to retire?" Now, here's the key distinction. This is being done in a practice study for financial planners and their businesses. This study is not, "Do you have a financial plan with savings and retirement accounts?" This study is not, "Do you have an IRA?" This study is a practice management study, and it is talking and trying to dig into what is the question of how are you going to retire out of your financial planning practice, which is a very difficult challenge for many financial planners.

You've built this practice. Do you sell it? Do you find a successor? How do you value it? It's a big issue in our industry. So this statistic that he's citing, he's making it sound like the cobbler's kid has no shoes. The 46% of financial planners have no retirement plan.

Guess what? I have a retirement plan, but if I were answering this survey, I would say, "No, I don't have a clear plan in place for my own retirement if I'm running a financial planning practice," because there are many things that can change. Those who are answering yes on this topic, it's talking about their business plan.

So if I asked Tony Robbins and I said, "Do you have a clear plan in place for your retirement from the Tony Robbins companies?" That's a very different question if I ask him, "Do you have assets set aside and earmarked towards your retirement?" or "Do you know the retirement number?" Again, did he read the study?

I don't know, but to me, it's fairly clear. This is in the context of the entire survey. You can read the whole thing for yourself. The entire thing is about business models. If I were answering that question, in my former practice, I would have answered no for various reasons.

Again, this says 56%, 54% have a clear plan in place for their own retirement. That's a business transition plan. I think the fact that 54% of financial planners have a clear plan in place for their own retirement and their business transition, in my mind, that is an amazing number, knowing the complexities of the financial planning business and how to do it.

It's a big example. Let's dig into myth number four. One of the things that concerns me is it doesn't seem in this book, it's a little bit sloppy. I was surprised by this because I don't think Tony Robbins is not a sloppy guy. It's just his fact checkers or whatever didn't...

I would assume he would have the best people in the business fact checking this thing. I don't know, it surprises me. Myth number four here, it just illustrates that he doesn't really understand some of these issues or terms. Myth four is called, "I'm your broker and I'm here to help." He's talking about the difference between the fiduciary standard and the suitability standard.

This is an interesting discussion and it's fairly complicated. I can't go into details. The show is already ridiculously long and I could do an hour show on the fiduciary standard versus the suitability standard. It is complicated. Robbins presents the simplified version. My issue with it is how he presents it, because he presents it without any logical arguments and his entire presentation is based upon lampooning the suitability standard as ridiculous.

Now, for clarity, I am in favor of a fiduciary standard, pretty much. I've always conducted everything under a fiduciary standard and I think that anybody who's managing investments should be managing them under a fiduciary standard. Now, that's different than—that's why I said in the business, it's a bigger issue than that because sometimes you're managing investments and sometimes you're selling products and that's the problem.

The issue is fairly complicated, but I am in favor of the fiduciary standard. I've taken fiduciary oaths at least three different versions, I think, that I can think of. Consider how he lampoons and this is where he argues from the perspective of the suitability standard. Page 125. Here's the truth.

The financial services industry has many caring people of the highest integrity who truly want to do what's in the best interest of their clients. Unfortunately, many are operating in a closed circuit environment in which the tools at their disposal are pre-engineered to be in the best interest of the house.

True. The system is designed to reward them for selling, not for providing conflict-free advice. Also true. And the product or fund they sell you doesn't necessarily have to be the best available or even in your best interest. True. By legal definition, all they have to do is provide you with a product that is suitable.

True. What kind of standard is suitable? Do you want a suitable partner for life? "Honey, how was it for you tonight?" "Eh, the sex was suitable." Are you going to be promoted for doing suitable work? Do you fly the airline with a suitable safety record? Or better yet, let's go to lunch here.

I hear the food is suitable. Yet according to David Karp, a registered investment advisor, the suitability standard essentially says, "It doesn't matter who benefits more, the client or advisor. As long as an investment is suitable, meets the general direction of your goals and objectives, at the time it was placed for the client, the advisor is held free of liability." The gold standard.

To receive conflict-free advice, we must align ourselves with a fiduciary. A fiduciary is a legal standard adopted by a relatively small but growing segment of independent financial professionals who have abandoned their big-box firms, relinquished their broker status, and made the decision to become a registered investment advisor. These professionals get paid for financial advice and, by law, must remove any potential conflicts of interest or, at a minimum, disclose them, and put the client's needs above their own.

Imagine having investment advice where you knew that the law protected you from your advisor steering you in a specific direction or to a specific fund to make more money off of you. And he goes on as to how to find one. If there's a single step you could take to solidify your position as an insider, it's to align yourself with a fiduciary, an independent registered investment advisor, RIA for short.

Now, is that all true? Mostly. Most of the stuff is true. And I understand why he might not get these terms. It took me years to figure out the terms myself. But if you're writing a book on it, make sure you understand the terms. First of all, the independent registered investment advisor is the firm.

And then there's going to be an investment advisor representative, IAR, for that registered investment advisor, RIA, the firm. As I have an RIA firm, it's in process. I haven't finalized the paperwork. I've filed it and then it got... Anyway. So been through this process, and I'm familiar with it.

I've just got the whole thing on hold while I start this show. But I have an RIA firm and I'm a representative of that firm. I would hire then an independent advisor representative, IAR, to work for the firm. At Northwestern Mutual, before I left, I was an independent advisor representative of Northwestern Mutual Investment Services, which was a registered investment advisor.

Excuse me. What was the name of the company that was the registered investment advisor firm? Anyway, we had a registered investment advisory firm. I lived and worked under a legal fiduciary standard for the clients for whom I was working in that capacity. That was not all clients. And the key is that it's very difficult to apply a fiduciary standard to life insurance and products that are affected with commissions.

Now, the other challenge is that I always lived under a fiduciary standard, not because necessarily of the internal firm requirements, although that did exist, but it was more specific, but as a certified financial planner. A fiduciary standard is not only applied to registered investment advisors. All CFP certificates have taken a fiduciary oath to act in a fiduciary manner when they're involved in providing financial planning services.

So as a CFP certificate, regardless of my capacity, I was always held to a fiduciary standard. And then if you're a member of other organizations, so if you're a member of NAPFA, National Association of Personal Financial Advisors, or the XY Planning Network guys I work with, all of the people involved there have taken a fiduciary oath.

And worse, he mixes up the definitions of a fiduciary stand of duty and a suitability standard when using industry terms of fee-based, fee-only, and commission-based. And what's not sad, I mean, I don't want to be too strong with this, but what his fact checker should have gotten on page 132, he talks about how to find a fiduciary, and he says, you know, find a link to the National Association of Personal Financial Advisors, NAPFA.

And then it says, directory of fee-based advisors. Every NAPFA member that reads this book will be cringing. NAPFA members are not fee-based. Fee-based means that the most of your income comes from investment fees, and you still accept some commission product work. NAPFA does not permit fee-based planners. They permit fee-only planners.

And NAPFA, the entire organization, is fee-only. In fact, on the very same page, practically, it's at the top of the next one, number four, make sure the NAPFA, so he reposts NAPFA's guidelines for criteria to consider when selecting an advisor. Number four, make sure the registered investment advisor does not have an affiliation with a broker-dealer.

This is sometimes the worst offense when a fiduciary also sells products and gets investment commissions as well. So just the fact that NAPFA is listed as a fee-based advisor, and that's what a fee-based advisor is, is number four. So it's really tough. Actually, I constantly find myself having to learn and say, "Okay, let me adjust this." But the point is that it's a little bit sloppy.

But as bad as that is, it's really not the worst problem. Because later in the book, he's talking about a fiduciary, but then he recommends private placement life insurance. Your fiduciary cannot sell that to you. Excuse me, your RIA, your fee-only registered investment advisor, can't sell that to you because then they would be accepting commissions.

And they would have to do it as a separate firm. It's this whole complicated, stupid world that we live in with the regulations. Can't buy is fixed index annuity. So the debate exists for a reason. It's intense for a reason in our industry. Personally, I'm unconvinced the suitability versus fiduciary standard is actually going to make any difference for clients.

Again, I'm in favor of a fiduciary standard of care. But the current system as it is in a very tough spot. And I think a better difference would be distinguishing between financial advice and product sales. I think that would be key. And if you're involved in product sales, be involved in product sales.

Don't be involved in financial advice. We'll see where things shake out. The SEC is studying it and we'll see where things shake out. But I don't think it matters because I know lots of good advisors who give objective advice in either scenario. I've lived in both worlds. I gave the same advice in both scenarios.

And I know that there are lots of people who would, even in a fiduciary system, would be completely prone to self-dealing and working in their best interest instead of the client's. And can you blame them? Look at the world we live in. In a world where the president of the United States, from both parties, by the way, for many past administrations, the president of the United States lies repeatedly to people, including lying under oath.

Example, Bill Clinton, lying under oath, lying consistently, George W. Bush and Barack Obama, lying consistently. Here's what I'm going to do. Don't do it. It's absurd. In the current administration, 2014, you have the attorney general, who's supposedly the person who's responsible for upholding the law, lying to Congress on multiple occasions.

You have the head of the IRS, in my opinion, lying to the public about the, "Oh, we have the missing emails." You have the secretary of state and possible future presidential candidate lying about the Benghazi events. And was it a few weeks ago, Jonathan Gruber, the primary architect of Obamacare, openly admits that they purposely lied, concealed, evaded, manipulated, and twisted events to get their purpose and agenda for health care pushed forward.

Do you expect me to believe that any of these people have any interest in the truth as some kind of object of standard? Give me a break. I don't trust any of them. So when that is the government that's in charge of the SEC, do you expect me to believe that's going to make a difference?

In our current society, there's no moral foundation for holding your word by anybody for anything. And there are a few people that still exist in it. And yes, the legal system is there to hold people accountable. And does it do it? Yeah, sometimes. But there's no moral authority. No one has any moral authority from any enforcement division to talk about this.

I don't trust any of them. And by the way, it's not an Obama thing. It's every single government administration we've had in my lifetime, and certainly a long time before my lifetime, has been the same. Best example, listen to how they campaign. Listen to how the news people report this.

We expect so-and-so, now that they've won their primary election, to modify their position. Are you going to change your political stance now? It's all lies. So my point is that I don't think it's really going to matter. I think what matters is you've got to find somebody with character.

And I have found people in the investment business in every model, with every product, that I said, "This person has character, and this person is genuine, and I would trust." And I've found people in every model that I wouldn't leave my wife in the same room with alone for five minutes.

I wouldn't, for an instant. Another issue I have is with such a focus, especially making this one of the myths on the suitability standard versus the fiduciary standard, I think that raises an extra measure here with regard to what the value, what was Tony doing with his book? And halfway through this book, I started thinking to myself, "Man, he's mentioning a lot of companies really positively.

This seems strange." And I got the feeling, I was like, "Is this a 600-page sales letter?" So I hadn't picked up on it until about halfway through. The first company that he really emphasizes is a company called Hightower, which is an RIA firm. He emphasizes it right here in the fiduciary chapter, which is a registered investment advisory firm.

And he says, "I found out about this company, and I think his advisor is with Hightower." And he says, "Hightower is really great, and they've created this great product, and I don't have any connection with them at the moment. But we're in talks, and that may change in the future." So I thought, "Wow, this is really great.

Good for him for highlighting it, and that would be great." Well, I go on, and what I found out is he goes on and mentions other companies. And I just got this strange feeling. So I went looking for disclosures, and I went to the appendices. And I finally figured out that several of the companies that are profiled in the book are actually partnerships with him.

So you've got companies, America's Best, 401(k), he owns a stake in that, which is heavily recommended as a 401(k) provider. Advisors Excel, and then a subsidiary there, a joint venture product called Lifetime Income. So these are the firms that he's setting up a scenario with to sell annuity products and life insurance products and 401(k) products.

And so he uses a lot of these companies in his examples. So you say, "Okay, well, that's fine. Nothing wrong with that." But then I thought, "Well, is he really giving a fiduciary standard here? Is he using this book as a... And by the way, using the book as a sales letter does not violate a fiduciary standard.

But I just thought, is he practicing full and complete radical transparency?" Well, I don't know. I think he is because it's in the appendices. But it's constant throughout the book. So for example, page 170, talking about annuities, fixed index annuities, the solution. If you have an annuity, regardless of what type, it's always beneficial to get a review by an annuity specialist.

You can reach out to an annuity specialist at lifetimeincome@lifetimeincome.com, and he or she will perform a complimentary review, which will help you discover the pros and cons of your annuity, determine the actual fees you're paying, assess whether or not the guarantees are the highest available, and decide whether to keep it or not, or get out of your current annuity and exchange it for a different type of annuity.

So that's brilliant marketing. And this is what I'm going to focus on. I'll come back to the question of this is okay or not. This is utterly brilliant. This is amazingly brilliant what he's done. And I didn't pick up on it until about halfway out, halfway through. But let me share with you what he's done with this book.

On the front page of the book, he says, "I've donated all of my profits to a charity that's feeding people." And so you buy the book, and the money from that is donated to the charity. And you read the book, and you benefit, and then you act on the advice in the book.

And he's created this amazing win, win, win, win, win scenario, win for all involved. And I really am impressed by it. It's really impressive. He laid this thing out, and it's brilliant. He writes a book out of indignation over a financial collapse. He researches some really great companies that are providing solutions with his research team.

He leverages the power of his personal brand to create, get access, and create an amazing, really a great book. Then he donates all the profits from the book to the food charity, giving himself a charitable deduction, while on the same hand using the book as an incredible 600-page sales letter for his seminars and for his other products, and most importantly for these companies.

So he gains a massive increase in the value of the companies he's partnered with from people acting on behalf of the advice and serving millions of people. And the way he's done it in the book is amazing. So the book is a 600-page sales letter. It's a well-written one with tons of information.

And he's got driving people to the website and to an application, a smartphone app, which is a really great lead generation tool. And he's driving people to his teams all the way through. Isn't that amazing? When I finally figured it out, and again, maybe I was dense, I went back and looked, and I did find that each time he introduced a company, he said, "I've now partnered with them." And by the way, I'll get to what I think in a second.

He said, "I've now partnered with them." I had missed it the first time. Then I went back and I said, "This is amazing. Every single financial planner should be following this model, writing a 600-page sales letter and doing this." Frankly, I'm kind of jealous of him. He's essentially created what I'd love to create.

He's got electronic tools to make it easy. He's got electronic capture. He's got all these tools with Hightower and America's Best and all these incredible flow of interest. He's created an amazing process disclosing all the problems. I think it's really amazing. I do not for an instant doubt Tony's heart, his passion, his genuineness, his honesty, his authenticity, his righteous indignation at the industry, and his desire to help people and to give back.

I don't doubt it for an instant. I think he's done a great job at it. I just didn't figure it out until halfway through the book. I hope to copy him someday. I think it's amazing. But I'm not sure he could actually do this as a fee-only advisor. I'm not sure he could do it as a fiduciary fee-only advisor.

It'd be a nightmare to work the paperwork work. So that's the conundrum constantly. The toughest question I get asked is, "How do I find a good financial advisor?" So admire that and learn from it, because he has done an amazing job. When I finally figured that out, it all clicked for me.

That's the value in my mind of good sales. Good sales is giving people a ton of information and a ton of value. That's what I'm doing on the show, trying to give away a ton of information and a ton of value in exchange for selling my ancillary products as I develop them.

That is what I'm doing. So I think it is awesome. Other concerns here. It seems like he doesn't clearly write about just some basics of some financial products. Another example that I pointed out, page 438, he's talking about annuities. It says, as a frequently asked question, about fixed index annuities.

"What happens if I die early?" If you die before turning on your income stream, your entire account balance is left to your heirs. This is a huge benefit over a traditional income annuity. When you do decide to eventually turn on your lifetime income stream with a simple phone call, you do not forfeit your entire account to the insurance company.

Your heirs would still get your account balance minus any income payments you would take into that point. It's completely flawed, because no annuity do you ever lose the value of until you annuitize it. And then when you annuitize it, based upon the payout options that you select at the time you turn on the annuity income stream, that's what determines what benefit your beneficiaries receive.

And that's exactly the same with a fixed index annuity as it is with any other annuity product. So it's like this whole thing about a differentiation. There's no differentiation there. I get an issue that some of the arguments are not fairly or well or fairly presented. And probably the best example here, and I get that not everyone can present all sides of an argument.

I probably drive people crazy with trying to give every side of an argument. But some of these shortfalls in the book are pretty serious. The best example here is myth number three, which is entitled "Our Returns, What You See Is What You Get." And in here, he makes a big deal out of time-weighted returns versus dollar-weighted returns.

And so I'm going to read a couple of just excerpted quotes here from a few consecutive pages here. And these are just one or two sentence options here. "Today, the mutual fund industry has been able to use a tricky method to calculate and publish returns that are, as Jack Bogle says, not actually earned by the investors.

Now that you're an insider, beware. Average returns have a built-in illusion, spinning a performance enhancement that doesn't exist. The math magicians on Wall Street have managed to calculate their returns to look even better. How so? In short, when the mutual fund advertises a specific return, it's not, as Jack Bogle says, the return you actually earn.

Why? Because the returns you see in the brochure are known as time-weighted returns. Sounds complicated, but it's not. However, feel free to use that to look brilliant at your next cocktail party." Goes on and talks about real returns. "And you must also remember that the returns reported by mutual funds are based on a theoretical person who invested all of his money on day one.

This just isn't true for most, so we can't delude ourselves into believing that the glossy brochure returns are the same as what we have actually received in our account." I don't get why he even included this, because to me this is a non-issue. I know Jack Bogle makes a big difference out of this, but I don't think he's making a...

I don't think... I don't buy his argument. I really don't. I have a ton of respect for him, but I don't buy his argument on this one. "The difference between time-weighted returns and dollar-weighted returns. Time-weighted returns exist so that you can compare a portfolio manager's performance independent of what the flows in or out of his or her fund are.

That's what they exist for. Dollar-weighted returns have to do with the dollars that are actually in the fund and tracking them through." Now, Robbins is right, and Bogle's right. You only get to spend dollar-weighted returns, your dollar-weighted returns. But the issue is that what's being talked about here is not essentially the issue of how do I...

there's no lies being made here. And the biggest problem is there are essentially three different time-weighted versus dollar-weighted returns that we... excuse me, three different returns that we have to track. So the time-weighted return ignores asset inflows and outflows of the portfolio, but the dollar-weighted on their portfolio talks about the mutual fund investors.

Well, think about how a mutual fund works. You have a portfolio manager that you hire to run an investment portfolio. And here's what would actually could happen if you were to compare the differential between these two numbers. Let's pretend that I start a mutual fund, and I'm going to start an open-end investment company.

We're going to call it Sheetz Capital Management. And you think that I'm just brilliant, so you go ahead and invest with me right up front. And so I take and I invest your money. And this year, I do really... I invest the money, and I make you... I'm going to charge you a 1% management fee as far as a portfolio fee that goes to the investment advisor on the account, on the mutual fund account.

And so I charge 1% fee. And this year, I make 15% returns. And so net of fees, you get 14% return on your money. And let's say that the market was flat this year. So all of a sudden, I'm getting all kinds of people really interested in my fund.

And so I get $10 billion all of a sudden shows up in my fund. And the people say, "Hey, listen, we want you to invest our money." Well, now I'm sitting on $10 billion. And a month later, I'm still trying to figure out where do I invest this $10 billion?

What's my next good idea? I can't pour it all into one thing. And so my fund is flat. The average person, the average dollar in the fund is flat. But your money is up, what did I say, 14%. Whatever the number was, I said. That's the difference between time weighted returns and dollar weighted returns.

So a time weighted return formula would ignore the $10 billion of new cash flow into my fund. And it would just simply focus on the actual performance that I had returned. That's how numbers are reported. But worse, so Bogle, and I guess Robbins too, wants this to be reported for actually the cash flows in and out of the fund.

But this is meaningless in the fund. And my issue with it, the portfolio manager can't control the cash flows in and out of the fund. And the portfolio manager would rather if they just all stayed in. And he would love it if the dollar weighted return and the time weighted return completely matched.

But even still, that doesn't do you any good. Because just the dollar weighted return of the fund doesn't tell you what your actual rate of return is. So this is your advisor's job to calculate for you. I used to run this for all of my clients. Here's what your actual investment performance has been net of fees, the actual money that's actually growing.

This is what your actual performance is. So it's a big deal. I don't get why he even included this whole section because it's not a... I mean, unless I'm ignorant on something, and if I am, you let me know. But I went back and in preparing for the show, I went and read Bogle's stuff on it.

I read his speeches on it. I'm like, this doesn't make any sense of what he's saying. And it just seems like Vanguard has more persistency with their investors than many other fund companies. I think it just would help Vanguard. And that's why he says it. But I don't think it's an accurate argument.

Anyway, let's wrap. Let's talk about active investing versus passive investing. Throughout the book, this is a constant tension. And if you're trying to gain from this book, what you should do with active versus passive, this is really, really tough to do. And I don't know how you could. And it's kind of troubling because I think it's going to leave people kind of saying, "Huh, what do I do?" In the beginning, he talks about no one can beat the market.

But then he gives countless examples of people that do beat the market. He talks about in the beginning, a broad base of research discussing about mutual fund managers beating their market index. But then he doesn't clarify that that's different than you in your situation looking to beat your index.

The index is utterly meaningless. That's useful as a point for comparison. But he gives example after example from his own life of essentially beating the market. On page 178, he talks about buying a market-linked CD where he was earning 20 times the rate of a traditional CD with the same FDIC protection, where his advisor had found him some nice market-linked CDs.

On page 283, he talks about the fact that what you're looking for is an asymmetric risk and reward, which is what all great investors seek. It's elusive, but it's out there. And it's just one more way that you can speed up your approach to realizing your dreams. And he talks on page 313, he gives an example from, again, his own life, where he's individually underwriting a real estate investment opportunity.

"My advisor and I found out that the real estate investment company was offering the first deed of trust on that house in Indian Wells as collateral on a $1 million loan, which would pay 10% interest for one year. It was willing to have one investor take this on, or as many as 25, each contributing $40,000.

In the end, I had decided to invest in the full $1 million myself. You might say, 'Wow, that's a great deal. You got a $100,000 profit to tie up your money for just one year. But Tony, what's your risk?' That's exactly why we did a lot of research. The home, we learned, after two qualified appraisals, was worth $2 million in its current state." So he goes on and he talks about the deal.

And basically what he did was value investing, saying there's a floor underneath it, it's a specific value, and here's why I chose this amount and chose this idea. So this is one of the toughest questions to talk through in a financial book, because the discussion is nuanced, as with everything.

And I feel like I'm not communicating it very well here. It's late at night and I'm tired and I probably should have done this. Anyway, I couldn't go another day without getting this done. But there are a number of other examples. In the book, the only actual passive investor is Bogle.

He's the only one of the people that he talks about that's a passive investor and indexer. Swenson isn't actually an indexer. Swenson is running a portfolio and he's got 1,500 guys working for him or something like that. But he recommends indexing, which I recommend too. And this is the problem, is that usually, if you're involved in the financial business, you basically just throw up your hands and say, "You should probably just index, because that's probably going to be your best scenario." And that saves some people from paying higher fees than necessary.

And the ones who ignore the advice to index are probably the ones who should be the ones who are ignoring the advice to index. I thought that Mark Faber on page 525 made the best point about active versus passive. And he talked about the idea that somebody can be a great stock picker, but that doesn't necessarily make them a great mutual fund portfolio manager.

And that's the issue. Just because a mutual fund manager can't "beat the market" doesn't mean that you can't beat the market. It's a big difference there. I've got a lot of reservations. I'm going to wrap this up a little quicker than I had planned. I hope this has been good.

Again, this is why I don't do book reviews, especially on 600-page books. It's a good book. But I have serious reservations about his fixed index annuity strategies. I'm not going to go into the details right now. This is on my research list. I've generally been in disfavor of fixed index annuities, although I could see a few areas they worked in.

But I've realized that there must be something I don't know. I've had some advisors that I respected talk about it. There might be something I don't know. So I need to go and research this again. I like annuities. I think annuities are very useful. I just don't like the fees on fixed index annuities.

But maybe I could see a place for them in a safer dollars bucket. The life insurance section isn't precise or very accurate as far as the details. It is nice to hear about somebody writing about life insurance and writing about it. For example, he talks about the fact that life insurance cash values are predominantly held by large banks as part of their tier one capital reserves.

It's nice to see that written by somebody who's not a life insurance salesman. I used to talk with that about my clients. But it's always a little bit suspect when it's coming from a life insurance salesperson. It kind of bugs me that he ignores some of the basic planning ideas, some of the basic defensive planning ideas.

Again, you can't put everything into one book, but essentially, he talks about living trusts and kind of exotic financial instruments. But there's no mention of disability income insurance. There's no mention of health insurance. There's no mention of property and casualty insurance. No, you can't cover it all in one book.

But in my mind, that's a big deal. So I finish up the show here. I'm just going to emphasize that one of the great values of books like this is you've got to read through the lines. I'm following the Tony Robbins—I'm trying to follow the Tony Robbins strategy. Page 187, Tony writes this, "I've always believed the best way to get a result, the fastest way, is to find someone who has already accomplished what you're after and model his or her behavior.

If you know someone who used to be overweight but has kept himself fit and healthy for a decade, model that person. You have a friend who used to be miserable in her relationship and now is passionate and in love for 10 years going, model her. You meet someone who started with nothing and has developed wealth and sustained it through time.

Learn from those strategies. These people aren't lucky. They're simply doing something different than you are in this area of life." When I looked at my notes here on the side, I wrote down, "Copy Tony Robbins' plan. Become a world-class expert. Become great at marketing and be well-marketed. Create a large company based upon your core skill.

Cash out with an IPO and then work to reduce your risk. And then continue to provide an ongoing service and build your brand and partner in entrepreneurial activities as joint venture activities." That's what I wrote down next to it. That's the plan that Tony Robbins does. The financial stuff that he talks about in here is really important and it has its place.

But keep it in context. Tony Robbins is not rich because he saved 15% of his income in a low-cost index fund. He's rich because he built a massive company and he sold it, cashed out through an IPO. He says in the book, "At one point in time, when the market was high, before it crashed, he was worth $400 million." I don't know if he's worth more or less than that.

Now, it's none of my business. It doesn't even matter. But the point is that you don't get the $400 million net worth by saving 15% of your $200,000 salary in an index fund. But you don't need to, which his point is valid. Other point, Tony was earning $10,000 a month at the age of 18.

Somewhere in the book, he says he made a million bucks a year soon after that, but it's not clear to me soon after. And it seems like that point in his life was pretty unstable. I'd planned to go through each of the examples of the billionaires that he profiles.

And it's really fascinating, the people that he profiles and their stories and the themes they could pick up. But one of the themes that you see is that every one of them applied asymmetric risk and reward into business. That's the horrible, tricky, cruel detail. An investment advisor makes money off of other people's money.

So on page 107 of the book, Robin says, and when he's talking about the risk of investing, like, "How could you be a sucker and take this bet? You put up the capital, you took all the risk, and they made money no matter what happened." That's what every single one of the billionaires profiled in the book did.

All of them. You put up the money, you put up the risk, and they made money no matter what happened. Now, they made a lot more money because they did well, and they were featured in the book because they did well. But that's what this constant tension is in the financial business.

They got asymmetric risk based upon running their investment fund scenario. That's what I'm trying to do with the show, exercise asymmetric risk. There's a small risk of failure to me if this fails, and there's a big risk of potential upside. So consider in your life where you can find asymmetric risk.

Tony closes the book with two valuable sections. He talks a big section about the future is brighter than you think. I had already written the script for the show I planned to release on the day before Thanksgiving, which was going to be basically why the future is really bright, why we have reasons for gratitude and optimism.

And then he wrote this amazing section on some advancements in technology that I was kind of aware of, but he gave some specific examples which were really, really cool. And then he ends with a focus on philanthropy. And as I close, it's a great book. Buy the book, read it.

And I wanted to go through some of those examples of issues I have with it to show how you do need to read stuff and you need to listen to stuff. Listen to what I say with your guard up, because when you're talking about money, there's a lot of bad information.

And listen with your filtering mechanism on. Look for the logical fallacies, look for the issues, look for the contradictions. And you'll find a lot of them in this book, but it's still a really great book. I know a few better that are as comprehensive in scope. Frankly, in the same way that I should probably cut shows like this up into dozens of smaller shows, Tony should probably have cut his book up into individual books, but he can't do that.

That's why he has 50-hour seminars. And I don't see any way that I could do and be happy with myself, cut this kind of stuff out and cut it into little sections. But the key is to take it all in and look for the connections, look for what you can learn.

The lens that I found that so far has held up to everything is the lens in the context of individual personal financial planning. I can't solve all of these big picture macroeconomic issues, but I can solve in an individual's life the issues that that individual is concerned about. Personal financial planning is what gives you safety, margin, stability in your life so that you can weather through the time so you don't have to become a statistic of dollar-weighted returns versus time-weighted returns.

The key is always an individual application. And as humans, we tend to look for black and white, right or wrong. And what we actually have to do is look at different sides of different discussions and then apply it in an individual situation. Another takeaway from the book, people are always attracted to the idea of a secret investment.

Secret investment doesn't matter. Investing is a business and a service, and you can hire it done, you can do it yourself, and either is fine. The personal financial plan is what matters. One of the weaknesses of the book is that it only focuses on financial assets, and I remain convinced that one of the best ways to prepare for fluctuations in financial assets is to get out of financial assets with different ways.

So if you're looking for a book to tell you the truth, I think you'll be disappointed. If you're looking for a really great survey of thoughts and ideas to kind of balance with and try to engage with, this is a great book. Look at your situation through a financial planning lens.

And from an investment perspective, I read you with one quote from the section with John Templeton. This quote comes from page 543. And John Templeton said, Tony Robbins asks, "What do you think is the single biggest mistake investors make? The great majority of people do not build up any wealth because they do not practice the self-discipline of saving some of their income every month.

But beyond that, once you've saved that money, then you have to invest it wisely in good bargains, and it's not easy. It's very rare for any one person, particularly any one person working in just their spare time, to select the right investments, any more than you would want to be your own medical doctor or your own lawyer.

It's not wise to try to be your own investment manager. It's better to find the best professionals, the wisest security analysts to help you." Tony Robbins, "When I was talking to some of your associates down in the Bahamas, I was asking them, 'What does he invest in?' And they said, 'Anything.

He'll buy a tree if he thinks he can get a good deal on it.' Then I said, 'How long will he hang on to it?' And they said, 'Forever, basically until it's worth more.' So John, how long do you hang on to an investment before you know to let it go?

How do you know if you've made a mistake? How do you know when it's time to actually liquidate?" John Templeton, "That is one of the most important questions. Many people will say, 'I know when to buy, but I don't know when to sell.' But over these 54 years that I've been helping investors, I think I've found the answer, and that is, you sell an asset only when you think you have found a different asset that's a 50% better bargain.

You search all the time for a bargain, and then you look at what you now own. If there's something in your present list that is a 50% less good bargain than the one you found, you sell the old one and you buy the new one. But even then, you're not right all the time." That's the lesson that can be applied from this book.

At least one of many lessons that can be applied to this book. I don't have any interest in being a billionaire hedge fund manager, and if you do, go for it. We need some good ones. But I do think that that can be applied in all of our lives, and it can be applied on the scale of, "How do you know when to sell your grandma's bell collection that she left you as an investment?" or "How do you know when to sell the next billion dollar company?" It's a great book.

I hope you check it out. Tony, thank you for writing the book. If you ever listen to this, I really enjoyed it. I hope you tighten it up in the next issue. But man, I tell you, I don't have the heart to think that I could write it. If I wrote one of these things, it would be 3,000 pages, and I could never finish it.

I had to get this show done, because I kept going deeper and deeper and deeper and deeper and thinking, "Well, I could research this and research that," and I just had to sit down and get it done. So as a recorder, it's late here, and I'm getting it out.

I apologize to you guys for missing the shows. I didn't need to do that. I have interviews I could have released, but I just... Anyway, it didn't mean to break the trust. So check back tomorrow for another great show. I don't know what it'll be about. I hope you guys enjoy this.

Check out the book. It's really good. I love it when guys like Tony Robbins take on projects like this, because they have a capacity that is phenomenal, that is so, so valuable. So that's it for today. Enjoy the rest of your day. Thank you for listening to today's show.

This show is intended to provide entertainment, education, and financial enlightenment. Your situation is unique, and I cannot deliver any actionable advice without knowing anything about you. This show is not, and is not intended, to be any form of financial advice. Please, develop a team of professional advisors who you find to be caring, competent, and trustworthy, and consult them, because they are the ones who can understand your specific needs, your specific goals, and provide specific answers to your questions.

Hold them accountable for your results. I've done my absolute best to be clear and accurate in today's show, but I'm one person, and I make mistakes. If you spot a mistake in something I've said, please come by the show page and comment, so we can all learn together. Until tomorrow, thanks for being here.

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