A few minutes ago, I posted a message in the Radical Personal Finance Facebook group that reads this, said, "I'm about to record my review of Tony Robbins' new book, Unshakeable. Should I do it in my current mood as ticked off angry Joshua and rip it to shreds or should I do it in my calm, collected, and intellectually neutral voice, carefully presenting the good, the bad, and the ugly?

What do you want?" Well, the responses were mixed, but in general, the voting was, "Give us the real version, but we're happy with angry." So I got a hot mic, a theme song, and a book to review. Let's see how this goes. You're going to find out with me.

Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge, skills, insight, and encouragement you need to live a rich and meaningful life now while building a plan for financial freedom in 10 years or less. My name is Joshua Sheets, and I am your host. And today, we review Tony Robbins' new financial book, Unshakeable, your financial freedom playbook, creating peace of mind in a world of volatility.

Way back in episode 109 of Radical Personal Finance, I reviewed Tony Robbins' other money book called Money, Master of the Game, Seven Simple Steps to Financial Freedom. And that interview was pretty large and pretty epic. I called it a comprehensive review and critique of the book. And I think it was about three hours.

Very popular show, but it was about three hours. And in that one, I went through the good, the bad, the ugly, all of it, and kind of demonstrated how the book was. And in many ways, Unshakeable is almost exactly like Money. In many ways, there are parallels between the content.

Unshakeable references Money. He treats Money as a quicker version of the book. He creates Unshakeable as a quicker version of the Money book. He says in the beginning of the book, there are three reasons why he wanted to write this new book. Number one was to reach as many people as possible with a shorter book than Money, also because of seeing fear all around, and to show you how to avoid getting eaten by sharks.

And so the books are complementary. Now today, I will not do a three-hour critique of this book. I don't think it's – it just doesn't merit it. I'm just going to do kind of a quick overview, tell you what I like about the book, also tell you what I don't like about the book.

Details on all of that in just a moment. But first, sponsor of today's show is You Need a Budget, the budgeting software that I use. And one of my biggest disappointments with Tony's books is he focuses on the things that I think are mostly irrelevant to many people's financial lives.

If we were to talk about the importance and the value of investing and having the most perfectly allocated portfolio versus the importance and value of budgeting, I think you got to start with the importance and value of budgeting. The portfolio is important but the portfolio is only important once you have a lot of money saved up.

However, you'll never get there if you don't master budgeting. So let me try to set a stronger foundation for you by encouraging you to download a free 34-day trial of the YNAB You Need a Budget budgeting software. Do that at RadicalPersonalFinance.com/YNAB, again, RadicalPersonalFinance.com/YNAB, free 34-day trial of the beautiful budgeting software that the YNAB team has created.

Really Jesse Mecham, the founder of YNAB, has created the most useful and powerful financial planning tool because it actually allows you to plan what to do with the money in your account, in your checking account. It solves the fundamental problem of budgeting which is not knowing how to allocate the money that's actually in your checking account.

The way that most people approach budgeting is broken because they start with this perfect month and then they kind of make this the model sample month and they have no tracking mechanism. YNAB solves those problems. Best thing you can do for your financial health is to start, if you're not already using it, at RadicalPersonalFinance.com/YNAB, download the free trial, free 34-day trial, and in addition, take the free classes on how to use the software.

The software is powerful but it's also a little bit unique and you'll want to learn how it works by taking all the free classes. Probably the best financial move you could make if you're not already using it, RadicalPersonalFinance.com/YNAB. All right, the book, Unshakeable. Big promise up front, your financial freedom playbook, creating peace of mind in a world of volatility.

Let me just get straight to the opinion that I have of this book. The book is divided into three distinct parts, three sections. Section one is called Wealth, the Rulebook. Section two is the Unshakeable Playbook and section three is the Psychology of Wealth. Now perhaps unsurprisingly, Tony is better at different parts of this than others.

I'd like to say the good, the bad, and the ugly but it starts the other way around. I'll call it the ugly, the bad, and the good. Section three, the Psychology of Wealth, is actually quite good because that's where Tony Robbins is a real expert. He seems to be that.

Either he's an expert and it's very good or I just don't know enough about psychology to spot the flaws, which is very possible, where I do know enough about money and financial planning to spot the flaws. But the third section of the book is excellent, the Psychology of Wealth.

In that, and let me lead with a strong, he talks about two chapters here, silencing the enemy within, six biggest mistakes that investors make and how to avoid them. Here they are. Mistake number one is seeking confirmation of your beliefs, why the best investors welcome opinions that contradict their own.

This is something we're all guilty of. We like to engage in confirmation bias and find people that agree with us so that we feel really good about ourselves and feel really good about our opinions. Unfortunately, this is really bad as a practice if you want to learn and make progress.

You have to ask harder questions. So it's good to always find people that disagree with you and listen to them and to their arguments. Mistake number two is mistaking recent events for ongoing trends, why most investors buy the wrong thing at exactly the wrong moment. Here he goes into the concept of recency bias.

It's very easy for us to take our recent history and try to extrapolate that out and say, "Oh, hey, this is always going to be this way." And so one of the most important things you need to train yourself to do is to have a long-term time perspective, to recognize that seasons come and seasons go.

If you're in the middle of a crisis, it won't always be this way. And if you're in the middle of a euphoric, phenomenal experience, it won't always be this way. And that applies without question to money and to investing. Mistake number three is overconfidence. Get real. We're trading our abilities and our knowledge as a recipe for disaster.

No question this is absolutely true. We are so prone to overconfidence. And he makes a point here in his research that men are especially prone to overconfidence when it comes to investing. Men traded 45% more than women, reducing their net returns by 2.65% per year because of worse trading.

That rings true to me based upon my experience. We have to be very careful to guard against overconfidence. One of the best ways, and the solution, get real, get honest, he applies that in terms of actually asking yourself, "Do you actually have a special advantage when it comes to investing?" The answer is probably not.

I'll expand that to say one of the best ways to overcome the mistake of overconfidence is to get good data, is to get good data on your actual performance. Easier said than done. Mistake four is greed, gambling, and the quest for home runs. It's tempting to swing for the fences, but victory goes to the steady survivors.

It's a marathon and not a sprint. And good investing absolutely is... you need to learn that when it comes to good investing. You really don't need Tony Robbins to tell you this if you're a Bible reader. King Solomon taught us that about 3,000 years ago when he, in the book of Proverbs, chapter 13, verse 11, King Solomon wrote, "Wealth gained hastily will dwindle, but whoever gathers little by little will increase it." Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.

So no question, it's a marathon and not a sprint. And it's very important to focus on steady growth, a concept we consistently talk about here on the show. Mistake number five, staying home. It's a big world out there. So how come most investors stay so close to home? Here at mistake five, Tony's just talking about the...

There's a name that the investment psychologists use for this, familiarity bias or something like that, where we usually think that if you're a US American listener, the United States of America is the best place in the world to invest. We usually look to buy real estate right next door to us instead of being willing to look in a town across the state or another state or another country.

And so the solution here is to expand your horizons and have a broader perspective. Mistake number six, negativity and loss aversion. Your brain wants you to be fearful in times of turmoil. Don't listen to it. And here the advice is, if you're prepared for times of turmoil, then you can be ready to shop.

And this really is so valuable. If you've done your homework on the market that you're in, you can approach, especially... Let me rephrase. If you've done your homework on the market that you're in, and if you've prepared for disaster in your own personal life, in your own personal finances, then at that point in time, you can position yourself to be greedy when others are fearful instead of being fearful when everyone else is fearful.

And that's something that you can teach yourself to do. No question. In chapter nine, Real Wealth talks about the importance of simply recognizing the gratitude of life. And so frankly, this third section of Tony's book is good. It's pretty good. Good stuff in here. Good. I like the mistakes and I like the solutions.

So that is the good. Flipping back to the middle section, section two, here's what he calls the unshakable playbook. He gives four... He gives what he calls the core four, four principles that can help guide every investment decision that you make. Now, let me give you these four principles.

These principles are useful in concept and incoherent in application. Core principle one is don't lose. Here of course, referring to the most famous of ideas that rule number one with money is not losing money. And he very much focuses on... But the best investors are obsessed with avoiding losses.

Why? Because they understand a simple but profound fact. The more money you lose, the harder it is to get back to where you started. So without question, this is an important one to focus on. Core principle number one, don't lose. The reason this is incoherent is nowhere in the book are we taught how to avoid losing money.

On the next page, page 98, Tony writes, "But in practical terms, how can you actually avoid losing money?" Well, for a start, it's important to recognize that financial markets are wildly unpredictable. The most successful investors recognize that none of us can consistently predict what the future holds. With that in mind, they always guard against the risk of unexpected events and the risk that they themselves can be wrong regardless of how smart they are.

And basically here he talks about how asset allocation is a guarding against being wrong. So don't lose money is a really nice concept. I love it as a concept. But practically speaking, you can have a great asset allocation plan and all that means is you lose money in some corners of your portfolio and not in others.

So big idea, big principle, incoherent in application and nowhere in the book are we taught how to actually do this. Core principle number two, asymmetric risk and reward. According to conventional wisdom, you need to take big risks to achieve big returns. But the best investors don't fall for this high risk, high return myth.

Instead, they hunt for investment opportunities that offer what they call asymmetric risk and reward. A fancy way of saying that the rewards should vastly outweigh the risks. In other words, these winning investors always seek to risk as little as possible to make as much as possible. That's the investors equivalent of nirvana.

Now I love this idea. I love the idea of asymmetric risk and I love the idea of reducing risk across the board. But once again, incoherent in that there's no application given that can actually be applied to you and me as an individual. And here's where I'll get to, let me just air here, one of my biggest complaints about this whole book.

These concepts are great. They're not well suited to the stock market. And this book is in essence a sales pitch for utilizing Tony's company services to help you invest your stocks. And I'll get to that in a moment because that's section one. These principles are so great, but they're incoherent because they're trying to be applied to the stock market.

And there's no possible way that you and I as individuals are going to get an asymmetric risk and reward as individual investors in index funds. You know the person who gets the asymmetric risk and reward? The financial manager. The person who runs the portfolio. When I handled portfolios before, I got an asymmetric risk and reward.

I would get paid fees based upon the management of client assets. I had no risk because it wasn't my money, but I had an asymmetric potential for reward in the fact that I was able to gain from the growth of my client's portfolios. That's how you get asymmetric risk and reward.

You don't get it from buying index funds. It doesn't happen. You get it from writing books to get people to buy index funds. And we'll get to the brilliance of Tony here in his book in a moment. Core principle number three, tax efficiency. As we discussed earlier, taxes can easily wipe out 30% or more of your investment returns if you're not careful.

Yet, mutual fund companies love to tout their pre-tax returns, obscuring the reality that there's only one number that truly matters, the net amount that you actually get to keep. Now, without question, tax efficiency is massively important. And tax efficiency in your investments is massively important. And tax efficiency of index funds is an incredible advantage that they have over active funds.

But this paragraph illustrates everything that makes me so angry about this book. It's the conflation of two ideas that are not logically connected. This is – I am more and more convinced that if you want to study anything and if we want to teach our children anything, one of the most important things to do is to teach our children logic and to teach the study of logic.

Because if you study logic and you just study – and it doesn't take a lot. Just memorize and learn a dozen or two dozen logical fallacies and start to look for them and you'll see them everywhere. Because this paragraph right here with regard to tax efficiency is a classic – in my opinion, a classic definition of a non sequitur, the non sequitur logical fallacy.

Non sequitur means I think does not follow literally in the Latin – the Latin definition doesn't follow. And a non sequitur is an inference that does not follow from the premises where – or a statement that does not follow logically from or is not clearly related to anything previously said.

And I'll give you some more just horrifying examples of that in this book. But just right here as I'm trying to get through the simplest of principles, we have to tackle it. As we discussed earlier, taxes can easily wipe out 30% or more of your investment returns if you're not careful.

Stop. Is that true? Yes, it is. That's an easily true statement. That's a valid and true premise. Yet mutual fund companies love to tout their pre-tax returns. Stop. Does that relate to the 30% – to the 30% statement before that? The point that he's trying to allege here is that because index funds are more tax efficient, because the portfolio managers don't trade the portfolio as quickly and when you're managing a mutual fund portfolio, anytime you trade a stock, you buy or sell, you're going to incur taxation on a gain or you're going to recognize a loss which can offset some of your other gains.

But you realize taxes when you sell and mutual funds don't sell as much because there are far fewer fundamental transactions in the portfolio. So that's the point that he's trying to make. But you're supposed to infer from that that this is all a game, that mutual fund companies love to tout their pre-tax returns in order to, as he continues, have the effect of obscuring the reality that there's only one number that truly matters, the net amount that you actually get to keep.

That is a silly, silly inference to draw. The reason that mutual fund companies tout their pre-tax returns is because mutual fund companies are pass-through organizations which don't pay taxes at the entity level. The individual investor pays taxes on their profits and it's the individual investor's tax rates and tax decisions that will affect what the actual level of taxation is, thus affecting the actual returns of the portfolio.

That's the fundamental truth. So how on earth could a mutual fund company give their post-tax returns when they don't pay taxes at the entity level, when the taxes are pass-through? They charge a management fee. The individual organizers and managers of the fund pay taxes. But the fund itself does not pay tax at the entity level.

That's why you report taxes on a pre-tax basis. It's exactly the same thing. Think about this. Salaries. If you go and you're applying for a job and job A offers you $100,000 per year salary and job B offers you a $200,000 a year salary, are they trying to hide the amount of money that you're going to pay on taxes or are they using the only basis of comp comparison that they can use to offer you the job?

They don't know how much you're going to pay in taxes. They don't know what your deductions are, what your credits are. They don't know your other income. They don't know how much unearned income you have. There's no possible way that an employer can say, "Well, we're going to offer you here an $82,000 per year post-tax salary." And the other employer can say, "I'm actually going to offer you $147,000 per year post-tax salary because I've calculated your state and federal income taxes." This is stupid.

This is utterly stupid. It's trying to find malice in an area where there's not. Now, if I'm wrong, I'm wrong, but I can't find any way that I am. You prove me wrong if I'm being too strong in my allegation. But this is a non sequitur. This is a logical fallacy.

This is the connection of two things that are not fundamental related. There's not a causative relationship here and you can't prove from the fact that mutual fund companies advertise pre-tax returns, you can't prove that there's malice and malintent in their heart any more than you can prove that two employers who are publicizing pre-tax incomes for you are trying to rip you off somehow.

Core principle number four, diversification. The fourth and final principle in the core four is perhaps the most obvious and fundamental of all, diversification. In its essence, it's what almost everyone knows. Don't put all your eggs in one basket. But there's a difference between knowing what to do and actually doing what you know.

As Princeton professor Burton Malkiel told me, there are four important ways to diversify effectively. One, diversify across asset classes. Two, diversify within asset classes. Three, diversify across markets, countries, and currencies around the world. Four, diversify across time. Now, is there anything wrong with that? No. Diversification is a fundamentally valuable principle.

It is crucial to the management, the excellent management of a portfolio. You've got to diversify your portfolio. But the reason why this angers me is because the entire section one was talking about stocks and there was no mention of diversification. Rather, all of the data that's presented is about stocks.

All of the data is about basically the US market. All of the graphs are of the Dow Jones Industrial Average and the returns of the S&P 500. You throw an entire wrench into section one when all of a sudden in section two you start talking about diversification. Now all of a sudden when you were talking about having a 0.05% expense ratio on a Vanguard massive stock index fund in the US stock market, you get all destroyed when all of a sudden you have to start calculating expense ratios on a bond fund, indexed or not.

All of the arguments about how obvious it was that everybody should buy index funds completely fall apart when you start talking about bond funds and you try to figure out bond index funds and is there a value in an actively managed bond fund versus a passively managed bond fund.

And the argument is not nearly as strong, but we're just going to skip that whole thing. Or what about real estate? How do you diversify into real estate but still do it with a 0.05% expense ratio? So once again, incoherent. It's a good principle, it's valuable, but it came after section one.

Now let's go to the ugly. Section one is, when I got to the end of it, a few pages in I was angry and then when I got to the end of it I was very close not being able to finish the book. It's a rare book that I don't finish.

I'm good at finishing books that I don't like. But in this case, and I'm glad I did finish it because section three was good. Section one is very frustrating. He gives here a few basic things. There are five chapters in section one. Section one is, chapter one is unshakable power and peace of mind in a world of uncertainty.

Chapter two, winter is coming, but when? These seven facts will free you from the fear of corrections and crashes. Chapter three, hidden fees and half-truths. How Wall Street fools you into overpaying for underperformance. Chapter four, rescuing our retirement plans. What your 401k provider doesn't want you to know. And chapter five, who can you really trust?

Pulling back the curtain on the tricks of the trade. So let's talk about these chapters because the simplest way for me to do it is to give you my chapter titles. Chapter one, unshakable. There are problems and the financial industry is the problem and you the investor of the problem, but we can solve it if you'll keep reading.

I wasn't very angry with chapter one, although I was a little bit, which we'll get to in a moment. But there are, that's my chapter one. Chapter two, winter is coming, but when? AKA, let me sell you that you should invest in stocks even though they're very volatile. Let me sell you on the idea that you should invest in stocks even though they're very volatile.

Chapter three, hidden fees and half-truths. My version. Chapter three, let me sell you on the fact that you should only ever invest in index funds, not in actively traded funds. Chapter four, by the way, nothing wrong with that, but that's an accurately titled chapter. Chapter four, rescuing our retirement plans.

Let me sell you on the fact that you should use America's Best 401k, which is a company that I'm a financial partner in and it's the best company for you to use for your manager 401k. Chapter five, who can you really trust? My title. Chapter five, let me sell you on the fact that you should use my company, Creative Planning, for your personal investment portfolio management, because that's what's sold in each of these chapters.

There is nothing wrong with that sale. I am slightly envious of Tony Robbins, a marketing genius, because if I still owned a financial planning firm, he is doing exactly what I would do. The thing that made me so angry when I was a licensed financial advisor was that so many other people seemed to be able to create good marketing programs that brought clients to the door.

But my industry was stuck in this model from 1947 where you pick up the phone and you randomly call people constantly and you don't have any way to make them come to you. I studied the world of marketing. I studied the world of direct marketing and I said, "Look, this can be done completely differently.

Why am I spending time, my time, my hours, sitting here in a system that was built 60 years ago, wasting time individually reaching out to individuals? Why don't I build a marketing machine that does the work for me?" I saw other people doing it. I saw so many other people doing it, but I wasn't allowed to do it.

That drove me nuts. I don't think there's anything wrong with either of the approaches. I have nothing but respect for Tony and I think this book is a brilliant business move. It's very possible that someday I will copy exactly what he's done with it because what he's done has been absolutely brilliant from a business perspective.

Absolutely brilliant. I hope this is not creating cognitive dissonance for you because I admire it. I'm just giving you a review of the book. Just because it's a brilliant business move doesn't mean that I think it's a great financial book. Now, more reasons on why I don't think it's a great financial book in a moment, but that's what this is.

This book is a 220-ish page brochure for his various financial planning firms, the ones that he's a partner in. That doesn't make it bad, but just that you need to know what it is. In many ways, you could compare this to the mutual fund brochures that are published by the various mutual fund companies.

Ideally mutual fund brochures are educational pieces. I used to like some of these when I was an advisor. When I was an advisor, the wholesalers come, the mutual fund salespeople, they're called wholesalers. They wholesale the funds to the advisors. They would come and they give the brochures. These brochures are very, very valuable because they teach clients a lot of valuable information.

For example, some of the charts that he uses in here, he uses in the middle of the book, he talks about how the damage if you missed out on some of the best days in the market, how bad your returns are if you just miss out on the top 10 days.

It's pretty sobering. The S&P 500 index, the data set here is the index annualized total return from 1996 to 2015 from the Schwab Center for Financial Research. The S&P 500 index returned during that 20-year time period from '96 to 2015, 8.2%. But if you weren't invested on the 10 top days of the market, that return dropped to 4.5% showing how bunched the returns are, especially the positive returns.

If you weren't invested on the top 20 days, your 8.2% return drops to 2.1%. If you missed the top 30 days, your 8.2% return dropped to 0.0%. If you missed the top 40 days in the market, only 40 days out of a 20-year time period, your 8.2% positive return dropped to a negative 2% return.

Now obviously, no investor is ever actually going to hit that number because who sells on day one, misses the next day, and then buys back in on day three. This is silly. It's a dynamic exercise to prove a point that the returns in mutual fund and in stock market investing are bunched.

But this exact same chart used to appear in the brochures that I would use for various mutual funds to display them to clients. I would use them as teaching tools to try to teach these exact concepts. And what Tony has done in the sales process here is exactly the sales process that I used to do for my individual clients.

It's fantastic. The man is a master of psychology. He's so good. Chapter 1, Unshakeable, is all about getting you to visualize what you want, which is financial security and financial freedom, but then to also bring in and cause you a sense of concern over what you might not know.

And the fact is there are big dangers, and I can help you with that. Number two is to sell on the idea of stocks, even though they're very volatile. I've done that sales presentation so many times using the same data and the same approaches that he uses here. Section three, hidden fees and half-truths.

Talk about the problems. This is where you get into differentiation. This is exactly what a financial advisor needs to do, is talk about why you're different. When I closed my previous firm, I filed paperwork to start and set up my own RIA, Registered Investment Advisory firm. I never actually got it distributed because Radical Personal Finance started to experience success, and I realized I couldn't do both well at that time.

I may do it in the future. You never know. But I couldn't do it well at that time, and so I shuttered it. And my plan was I was going to be a fee-only advisor of fiduciary, which is what he sells in chapter five, Who Can You Really Trust?

And I would have sold my clients on why you should work with me as a fee-only fiduciary, what the benefit was. My firm was called Fiduciary Financial Consulting, for crying out loud. And then I would have – in that term, I had decided to use a DFA, Dimensional Fund Advisors platform, which is exclusively index funds with a slight difference from the standard Vanguard approach.

And so I would have sold my clients on why they should invest using index funds in that particular situation. I didn't have any plans to work with – his chapter four is about America's Best 401(k). I didn't have any plans to work with specific retirement plans. But who knows?

Maybe one time and I would have found a provider to work with as well. So my hat's off to him. It's a great brochure. But you as a reader need to know this is a brochure. Now if you aren't familiar with reading mutual fund brochures, you probably should read a book like this.

And I think there will be a lot of good that comes out of this book. I really do. Because Tony has such a massive footprint. He gets people excited about reading books on money, which is fantastic. We need lots and lots of people to read books on personal finance.

And he's very good. All the information is really good. I don't have any problem with any of the data or the facts or even the conclusions that he draws in this entire book. I have very few quibbles. My quibbles are about style. And that's what I want to teach you now in terms of how you obfuscate the truth.

Just like I'm doing using a word like obfuscate. You conceal things and you make allegations and you commit logical fallacies because of – just you don't tell the other side. Now I don't accuse the author of malice. I think he's got a good heart. He wants to help people.

But maybe it's malice and incompetence. As he says, it's possible to be sincere and to be sincerely wrong. And again, he's not wrong. Tony Robbins has great advisors. He's got great people. I don't think he's wrong. I just think I hate this like twisted presentation of stuff. Let me give you an example.

From page 13, reading here – and let me start on page 12. Avoid the Sharks is the title here. And you need to know. It's possible that I have still a continuing bias because I've come from the financial advisor industry and I have spent so many years getting dumped on.

It's possible that I'm a little bit more sensitive than the average person to this stuff because it's a very hard industry to work in ethically and uprightly. So you should know that about me. I think that probably does affect me. But it just does make me very sensitive to make sure that the information is presented accurately as I understand accuracy.

My third reason for writing this book is that I want to show you how to avoid getting eaten by sharks. Stop. Psychological technique. What has he just done? He's labeled his opponent as a shark, which is something that inspires fear. He didn't say, "My third reason for writing this book is that I want to show you how to save money and be careful in case you meet an unscrupulous and unethical financial advisor." No.

He said, "My third reason for writing this book is that I want to show you how to avoid getting eaten by sharks." Fair. Okay? I'm not using psychologically strong language. I'm doing the same thing right now by using an emotive, emotionally engaged, intense form of communication here where I'm emotionally engaged in my speech.

No problem. Just recognize it for what it is. If you're reading a book like this, you should write, "Emotional attack," blah, blah, blah, labeling your opponent. As we'll discuss later, one of the biggest obstacles to achieving financial success is the difficulty of figuring out who you can and cannot trust.

True statement. "There are plenty of fantastic human beings working in the financial field, people who always remember their mom's birthday, who are kind to dogs, and who have impeccable personal hygiene." Stop. Does any of that have to do with the fact that they're working in the financial field? No.

An accurate statement would be an accurate charitable, magnanimous statement that seeks to be conciliatory and give as much benefit to the doubt as possible would be this. "There are plenty of fantastic human beings working in the financial field who are hardworking, knowledgeable, and care deeply about their client's best interests." But no, the allegation here is they care about their mom's birthday, they're kind to dogs, and have great hygiene.

"But they're not necessarily looking out for your best interests." True statement. Most people who you think are providing unbiased financial, in scare quotes, "advice" are actually brokers, even if they prefer to go by other titles. Stop. Is that true? I don't know whether the first part of that statement is true.

Most people who you think are providing unbiased financial advice, I don't know that any of us can provide unbiased financial advice. I don't think it's possible. But I'm happy to allow and be generous and say, "Okay, this is a true statement." People are actually brokers, even if they prefer to go by other titles.

That is true. The majority, the vast majority of financial advisors are indeed brokers. Continuing on. "They make hefty commissions by selling products, whether it's stocks, bonds, mutual funds, retirement accounts, insurance, or whatever else might pay for their next trip to the Bahamas." The big question here is that somebody's selling whatever they want in order to make their next trip to the Bahamas.

We're going to come back to that list in a moment. Next sentence. "As you'll soon learn, only a tiny subset of advisors is legally required to put your best interests ahead of its own." That, again, is a textbook non sequitur. Statement one is, "They make hefty commissions by selling products, whether it's stocks, bonds, mutual funds, retirement accounts, insurance, or whatever else might pay for their next trip to the Bahamas." That is true.

"As you'll soon learn, only a tiny subset of advisors is legally required to put your best interests ahead of its own." That's also true, but these statements do not necessarily connect because a fiduciary advisor who is legally required to put your best interests ahead of its own also sells stocks, bonds, and mutual funds.

It's just that they have a different compensation structure that allows them to be compensated in the form of fees rather than in the form of commissions. And also a fiduciary advisor also takes trips to the Bahamas which are paid for from the fees that they earn from their financial planning clients.

So once again, this is all shell games. But by association rather than any kind of actual evidence presenting something that says, "Here's the number of people that were ripped off. Let's talk about that. That would be a good thing to do." After writing Money Master the Game, I saw once again how easy it is to get fooled by Wall Street.

Peter Malik, a certified financial planner and attorney whom I respect tremendously, arranged a meeting with me to share what he cryptically described as "some crucial information." Okay, what's the crucial information? Let's continue on. The investment magazine Barron's rated Peter and his company Creative Planning the number one independent financial advisor in America in 2013, 2014, and 2015, while Forbes named it the top investment advisor in the United States in 2016 based on 10-year growth, and CNBC ranked it as the number one U.S.

wealth management firm in 2014 and 2015. That's a big mouthful, isn't it? Does it have anything to do with the cryptic and crucial information? No, but it is an appeal to authority, another logical fallacy. The idea is because of somebody's authority, this is why we should listen to them.

Now here's – I don't think there's anything wrong with that. I'm a certified – I'm a – I have to say I'm a certified financial planner. My license – my certified financial planner – because I didn't finish my CE this year and so I need to catch up and reinstate it.

I was formerly a certified financial planner, Chartered Life Underwriter, Chartered Financial Consultant, blah, blah, blah, blah, blah. What does that mean? Well, that means that I have some knowledge that's applicable to the subject matter at hand. But the fact that Peter's company is highly ranked by Barron's and Forbes doesn't have anything to do with the crucial information.

Thus, it's a fallacious appeal to authority, not a proper appeal to authority. For example, if you need coaching on how to manage a football team and Bill Belichick is brought to you, somebody will introduce him to say, "This is Coach Bill Belichick. He is a winning coach who has won however many Super Bowls and has a huge, tremendous, incredible winning record with football.

I have no idea. I don't watch – I don't care about – I don't watch sports. He's a good coach, right?" So there you have – the authority is connected to the task at hand and you need help on coaching on how to win a football game with regard to how to coach a team.

Now if somebody brings you and says, "Here, Robert Kraft is the owner of the New England Patriots which has won all these Super Bowls," well, Robert Kraft might be able to give you good advice and help on how to run a team, how to work with a head coach, but he's probably not the person that you want to give advice to you in your actual management of the football game.

So that's what you got to look out for. When somebody is trying to establish authority, is the authority relevant to the question being asked? And here, the authority credentials which are bolded about how successful his company is, all these things mean that he's had a tremendously successful company. That's great.

But guess what? Merrill Lynch beats the pants off of him in terms of size. Morgan Stanley or whatever it's called now – it's still Morgan Stanley, right? They beat the pants off of him in terms of the size of their company. Bank of America is way bigger. So the appeal to authority here is fallacious because the fact is he's trying to paint him as a great guy, but on those terms, the CEO of Bank of America is a far more important person to listen to.

Continuing on, "When someone with Peter's expertise and reputation reaches out to me, I know that I'll learn something of real value. Peter flew specially from his home in Kansas to meet me in Los Angeles where I was conducting an Unleash the Power Within event." OK, this is normal. When I want to meet someone, I fly across the country to meet them.

This is common, especially when you're Tony Robbins. I'll get on the plane tomorrow to do a business deal with you and I'll pay for it myself. You don't have to fly me there. Of course, that's normal. "It was there that he dropped the bomb, explaining how some 'financial advisors' who market themselves as straight shooters were actually exploiting a gray area in the law to sell products that benefited themselves.

They claim to be fiduciaries, a small minority of advisors who are legally obligated to put their clients' interests first. In reality, they were unscrupulous salespeople who profited by misrepresenting themselves." Now, I worked as a professional financial advisor for six years and for the last going on 10 years to nine years, I've been in the financial advice industry.

The last four years, three years as a pundit, kind of a public commentator, I guess, and six years as an advisor. I had no idea what he's talking about. I had no idea what he was talking about. I put this out on Twitter. I was like, "Does anyone know what he's talking about?

What is he talking about that unscrupulous salespeople are misrepresenting themselves? I don't know what they're talking about." And a couple of people said, "Well, he's talking about the dual standard and dual registration where you're registered as a broker and also registered as a fiduciary advisor." I thought, "Oh, okay.

That's probably what it is." Well, that's confirmed on page 82. And I think here we have the fundamental problem with Tony Robbins' money books. Here on page 81 and 82, we're right in the middle of a chapter where he's talking about the fiduciary standard. I'm going to ignore the chapter on that just for the sake of time and to stay on point.

I'm not doing a three-hour review of this book. I need to do a show on the fiduciary standard. But in the middle of the chapter, he talks about dually registered advisors. He says this, "When I first learned about the difference between brokers and registered investment advisors, everything seemed so clear and simple to me." Here he's talking about what he wrote about in Money Master the Game.

"Everything seemed so clear and simple to me. You undoubtedly want someone who will act in your best interests, right? So it seemed obvious to insist on working with an independent advisor who's legally obliged to act as a fiduciary. I thought of fiduciaries as the gold standard, but then I discovered that this subject is murkier than I'd realized.

Here's the problem. The vast majority of independent advisors are registered as both fiduciaries and brokers." WTF? "In fact, as many as 26,000 out of 31,000 RIAs operate in this gray area where they have one foot in both camps. That's right, only 5,000 of the nation's 310,000 financial advisors are pure fiduciaries.

That's a measly 1.6%. Now you know why it's so hard to get unconflicted and transparent advice. When I wrote Money Master the Game, I became a champion of fiduciaries only to discover this inconvenient truth about dual registration, first brought to me by Peter Malik." Now when I had originally read the previous quote I read from the first chapter, I wrote beside it, "When?

When did this meeting happen?" My guess, I don't know the answer, I can't prove it, it's not recorded in the book, my guess is that this meeting happened after he wrote Money Master the Game, but I don't know that, maybe not. Maybe it was before when he's editing, I don't know.

Continuing on, one more paragraph. "It infuriated me to learn how these dual registrants actually operate. One moment they play the part of an independent advisor, reassuring you that they abide by the fiduciary standard and can provide you with conflict-free advice for a fee. A second later they switch hats and act as a broker, earning commissions by selling you products.

When they're playing this broker role, they no longer have to abide by the fiduciary standard. In other words, they're sometimes obliged to serve your best interests and sometimes not. How warped is that?" That's the silliest analysis of the fiduciary thing that I've ever heard. It has to be too strong, I don't know.

You wanted the show emotional, I try to be very careful with my words. It's just so silly. The fiduciary standard and the suitability standard are legitimate legal problems that have to do with ongoing service and the legal requirement on a financial advisor to maintain a portfolio for the benefit of the client on an ongoing basis.

It is an important discussion. I don't have an opinion on it. I struggle to know what's right. When I was a financial advisor, I was a duly registered advisor for the last couple of years when I was still licensed. I was registered with my brokerage and I was registered with my advisory company.

I was duly registered as both, but I just always tried to do what's in the best interest of my clients. I think most advisors are in the situation. The problem with the registered investment advisory system is you can't earn commissions and some products only pay their income on commissions such as insurance and some products only work – and some products are best paid income in the form of commissions.

That's where the argument is if you're going to – if I were going to provide – one of the arguments that the financial advice industry makes about the fiduciary standard is if you put the fiduciary standard on us across the board, we're not going to work with poor people.

That's true. Maybe all those poor people should go to Vanguard, but I would not – I wouldn't – I would not spend any time when I was an advisor. I would not spend any time servicing somebody who has $50,000 of investable assets if there weren't a potential to make a commission of some kind because the revenue into my practice is not worth it.

It is not worth my time to deal with difficult clients. Poor clients are the hardest to work with usually because they're insecure and unconfident for good reason, right? And there's not a lot of potential revenue and you can't do a lot to help them. It's not like working with an affluent – an affluent business owner has lots of things that you can do to work with to help them.

So those clients probably should go and it would be great if everyone would just go buy index funds. I don't know how to solve that problem. I see it from both sides. But back to paragraph – or chapter one where he talked about this. So now I know that was what he was referring to was unscrupulous salespeople.

It's nothing unscrupulous. That's how the business works. That's like by definition. That's how it works. They make hefty commissions by selling products. Listen, whether it's stocks, bonds, those are saleable on commission. If you want to buy stocks, you're going to pay a commission, either a very small commission to an online brokerage or a commission to a Main Street advisor.

Most of them don't do that anymore. But you can only buy stocks and bonds on commission in terms of to have them there. You can get advice on them in a registered investment advisory account, yes. Mutual funds, yes, sometimes sold by brokers, sometimes not. Mutual funds are not always sold.

You can go direct to fund and not deal with a commission salesperson. Retirement accounts, retirement accounts are not saleable unless we're talking about contracting with a third-party administrator, in which case you're buying something that's – is that – you're buying a retirement account? You can't buy a retirement account.

Insurance, insurance is always sold with commission. I'm not aware – maybe there is someone. I'm not aware of any insurance policy still. I think I had a listener who commented one time and said there was one, but I checked it out. I couldn't figure out whether it was true.

Insurance, to the best of my knowledge, is always sold on commission. So an advisor can't sell insurance. There's where we go to wrap up here. So what I did – so this book is a great brochure. It is brilliant sales brochure for the two companies that Tony has financial – that he's a partner in.

He's an investor in and a part owner. The two companies are America's Best, 401(k), and a firm called Creative Planning. Now America's Best, 401(k) is a company that handles 401(k) accounts. I looked them up. They are not a registered investment advisory firm. They're a service provider in the – at least I couldn't find that they were.

However, they have the identical address as the firm Creative Planning at 3400 College Boulevard, Leawood, Kansas. So they're using exactly the same address. I haven't researched this beyond this and I'm not going to. I just found this, at least this. So they are at least connected in some way.

I don't know if they're the common ownership. I couldn't find the information on America's Best, 401(k). So I don't know about common ownership. I don't know what the financial interests are of those involved. Tony does say that he's a partner in America's Best, 401(k), so he's a part owner.

I don't know if Peter Malik is involved in America's Best, 401(k). I don't know who – what the financial interests are. But Creative Planning is a registered investment advisory firm. As a registered investment advisory firm, that means that they have what's called a form ADV. If you want to cut past all the marketing junk on websites, just find the firm's form ADV.

This is the form that gets filed with the regulatory organizations that tells you exactly what's happening. It's a legal document. It has to be accurate. It has to be comprehensive. It has to say exactly how your business works. I know because I wrote one. I wrote mine from scratch when I was opening a firm.

So this is the form ADV, Part 2A, the disclosure brochure. Now here are the key things you need to be aware of, and this is what annoys me, is this entire book is trying to paint the industry as unethical, a bunch of charlatans and hooligans and sharks. Page 14, Creative Planning, Inc., form ADV.

I've gone through the different sections here. Tony Robbins is listed in the ADV. Two things I wanted to say. First, let's talk about fees, and then we'll go to page 14. Big giant chapter on fees. Big deal. It's a big deal, not big deal. It's a big deal. It's important.

Fees are a big deal. However, the analysis is, "Look, index funds have this tiny expense ratio. Vanguard, you can buy a fund with a 0.05% expense ratio." And then later we talk about the value of funds. I'm with him on that. But what annoys me is when people don't talk about the fees for financial planning.

So right here on the material changes, section two of their ADV, update to their annual fee calculation for creative planning. 1.20% on the first $500,000. 1% on assets of $500,000 to $2 million. That's exactly what I used to charge when I used to do this business. 0.85% for $2 million to $5 million of assets, 0.8, and it goes on from there.

The point is this, fees matter, and we should be very careful with fees. But don't use as your... It's a straw man comparison. There's another logical fallacy. "Well, look, index funds are really cheap, but you should go and choose creative planning." I'm with you. Good index funds are valuable in a portfolio, but don't compare 0.05% and ignore the fact that we're also going to be paying financial planning fees.

Financial advisors should earn their money. If you don't think they can earn their money, you shouldn't hire them. But don't use straw man arguments to make false comparisons. At least if you're going to talk about fees, talk about comparable fees between different advisory firms. Page 14, and I'm done with this review.

Insurance activities through creative planning risk management, creative planning benefits, and creative planning property and casualty LLC. Remember, anytime when you run an RIA, your ADV has to reflect any forms of compensation. Now, Robbins just spent all this time talking about the sharks and how working with a fee-only advisor is the only way to go, and fees are the only thing, and commissions can't be paid.

And I maintain this is an important discussion, but it's a red herring. Ah, another logical fallacy. It's a red herring because it's trying to indicate that somehow you can do it without paying commissions, and you can't. Creative planning has three related insurance agencies. This is what you have to do, is you have to set up a separate insurance agency as a separate entity, and you have to collect your fees through the context of that insurance agency, your commission, sorry, your commissions in that insurance agency so you don't mess up your RIA.

Creative planning has three related insurance agencies. Creative planning risk management provides individual life, disability, and long-term care coverage through various insurance companies. Creative planning benefits provides group health benefits through various insurance companies. Creative planning property and casualty LLC provides property and casualty coverage. Agents of creative planning may be referred to a related insurance agency.

Creative planning does not receive a referral fee. However, some of creative planning's personnel that are insurance agents may receive commissions for the sale of insurance products. The receipt of insurance commissions is in addition to any advisory fees charged by creative planning. Employees of the insurance agencies may refer clients to creative planning.

In these cases, creative planning will pay a referral fee by paying the insurance company up to 20 basis points, which is .20% of the total fee charged by creative planning to the client. Please refer to item 14, client referrals and other compensation. Clients are never obligated or required to purchase insurance products from one of our affiliated insurance companies and may choose any independent insurance agent and insurance company to purchase insurance products.

Regardless of the insurance agent selected, the insurance agent or agency will receive normal commissions from the sale. Please refer to item 14, client referrals and other compensation. For more information, you get the point. The point is this. This is a bunch of... I hate to use the word crap.

I really do. I don't know of another word. Yeah, some of you thought I was going to... No. I hate the word... I try not to use... I'm trying... Worked very hard to purge the word crap, but it's hard to have another word that expresses. We just spent a whole bunch of pages in a book talking about how, in your words, duly registered advisors are unethical and they're misrepresenting themselves, basically accused of misrepresentation, which is one step short of lying.

What a load of crap. Creative planning does exactly the same thing. They just have set it up on an entity level instead of with the individual advisor. I have no idea how many of their advisors are duly registered here. I don't know. But it's a bunch of shell game.

The problem is the stupid regulations in the financial industry that lead to this stuff. Most financial advisors that I have known don't care how they're compensated. A bunch of them are charlatans. Yes, I have all kinds of beefs to pick with the financial advisor industry, but this is the wrong way to represent it because it's...

You get the point. Here's what I would do if I were you. If you're new to financial books, read Unshakable if you like it. If you like Tony Robbins, great. Read Unshakable. Tony Robbins has access, because of his status, he has access to the world's greatest leading minds on this subject.

That makes these books worth the price of admission. I bought this thing on pre-order. I pre-ordered it when I saw that it came out because I knew it would be a big deal and I forgot about it and it showed up on my mailbox. These things are worth the price of admission because of the quotes and because of the access that he has.

He's also brilliant at conveying concepts. You should read them. If you care about money, you should read it because the man is a master of psychology. That's really good. If you've not been exposed to this stuff before, you should read this book in order to be exposed to the conflicts and the things, problems in the financial advice industry.

But more than anything, my encouragement to you is twofold. Once again, I sound like a broken record. Once again, study what people do, not what they say. Here's what Tony Robbins says in chapter two. He says, "Our capacity for pattern recognition is also the number one skill that can empower us to achieve financial prosperity.

Once you recognize the patterns in the financial markets, you can adapt to them, utilize them, and profit from them." Nonsense. "The number one skill that you can develop to achieve financial prosperity is the skill of earning a lot of money by building a massive business and income. That's the biggest thing." Page 26, "The single best place to compound money over many years is the stock market." Nonsense.

The single best place to compound money over many years is in your own massive and growing business, because that's what Tony Robbins did. I don't deny that he has a lot of money in the stock market. I don't deny that the stock market can be great, but that is not what's going to make you a mega, mega millionaire with a private jet and a house in Sun Valley, Idaho, and a house in Palm Beach, Florida.

You cannot get there from here. You cannot put aside 10 or 15 or 20% of your income and be really, really wealthy the way that Tony teaches. What you need to do is skip this stuff and go take his mastery courses, because there he pulls apart the business, business mastery, and all of his other stuff.

That's the stuff that matters. The man started off completely broke, raised by a single mom in poverty, and he's transformed himself into a mega, mega millionaire, but it wasn't because of investing in stocks. It was because he worked his tail off for years. He established a reputation. He chose a business that has massive leverage opportunities.

He played to his strengths. He became the best in the world at what he's good at. He built a huge business that he took public, which diversified his risk asset allocation, but not in the way that it's taught in the book. He built a huge business that he took public, built a massive lifestyle and still keeps part of it.

I'm sure. I don't know what his arrangements are, but keeps plenty of it to make money. He's engaging along the way in more businesses by partnering with other people who are experiencing the benefits of asymmetric risk and reward, which are the people running the businesses like Creative Planning and America's Best 401(k).

Don't listen to what he says other than to do what he says with a percentage of your wealth, which is what he would do. He'll probably, I don't know. I have no idea. There's no way that I could know, but let's say that 15 or 20% of his wealth is in stocks.

Great. He's got a great advisor. I think that's really smart, but he also owns a resort in Fiji and he has interest in all these different companies. That's where the money comes from and that's where I would put my life savings on a bet. I would put my life savings on a bet that the vast majority of his money is invested in his own private enterprises, not in publicly traded New York Stock Exchange listed stocks.

Sure he has some money there, but man, I would fall off my chair if it were more than 25 or 30% of his wealth. I really would. It's hard for me to imagine it being more than 20%. That's what frustrates me about this whole stupid personal finance business. That's what frustrates me is nobody tells the truth.

Now I'm not accusing him of being a liar. Hear me clearly. I'm just saying, watch what he does and go take his business mastery stuff. Skip this stuff. Finally, watch what he's done with the sale of this book. He built a huge, huge platform. You've seen this man's face everywhere in the last month.

If you pay any attention to this, he has a team behind him that is second to none, that gets him on every single media outlet and he's brilliant at it. He markets the book. Look how he markets the book. He markets the book as knowledge, which is true. Books are going to be one of your best investments you can make.

They're so packed and they're so cheap to buy if you read them. He markets the book. As he's marketing the book, he talks about the fact that he's not profiting from the book. This is a big deal. Right in the front of it, find it. I can't find it.

He markets right in the front where he's giving away all the profits of the book to feed hungry families. That is great. But notice what he's doing. Notice the tax planning. Royalties from the sale of a book create income. He doesn't need more income right now. What he does need is tax deductions.

By earning the royalties from the sale of the book and giving it all away, he creates a charitable tax deduction to offset his other forms of income. But what he does is from the sale of the book, he profits from the sale of the book because it's a brochure which sends clients to his other firms and which attracts other clients to his other businesses.

In those other firms, he's a partner who has an equity stake. His equity grows in value because the firm grows in value. He doesn't realize any income, so he pays no current taxes on the growth of those assets. He can defer those taxes over time. Why? That's because taxes matter as he talks about in section 2 where he talks about the core four.

Taxes matter. So notice what he's doing to plan for taxes which is donate the charitable income from the royalties – donate the royalties of the book as charitable income because that's not really going to make any difference in his lifestyle. He doesn't need it and the charitable tax deduction is valuable.

That said, profit from the growth of the value of the firms and from his other companies, profit from those where you don't incur taxation and that's a very, very efficient business. Copy what he does, not what he says. The book is unshakable, your financial freedom playbook creating peace of mind in a world of volatility.

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