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Tony Robbins lives in a castle, rides a private helicopter and employs thousands of people
around the world.

He owns a private beach resort on a private island in Fiji. He’s a New York Times bestselling
author. And when people like Bill Clinton, Oprah Winfrey, or Olympic Gold Medalist Serena
Williams need advice, they go to Tony Robbins.

If Tony isn’t successful, then I don’t know who is.

Yet he wasn’t always like this.

Tony grew up with an abusive mom and several dads who came into and out of his life. (The
men his mom dated.) He used to wash his dishes in the bathtub of his apartment. He was
scared that he wouldn’t make a big impact with his life.

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Now he gives speeches about how to be successful to packed stadiums. His events look
more like rock concerts than speeches.

What happened?

Tony has an incredible power to communicate with people. That’s how he made his fortune.
He understands what people want and what advice they need to hear to move forward.

Most people think of Tony as a “motivational speaker.” I think he goes much deeper
than “motivation.” Tony studies successful people like a detective, finding out clues to their
success. He uncovers what patterns make people successful. Then he copies the patterns in
his own life and teaches them to his students. And many people—a few of my friends
included—give Tony credit for changing the direction of their life.

In this book, Tony wants to show you how to achieve financial stability, then
financial freedom.

Tony believes that if you want to be wealthy, then you should learn from wealthy people.
That’s why he spent 4 years talking to dozens of billionaires and famous investors. People
who have spent their whole lives learning the rules of money. And he asked them to share
the exact strategies a regular person like you or me needs to feel safe about your
financial future and to become financially free, even in our fast-changing world.
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1. Investing: Not Just For The 1%

Many people are scared of the word “investing.”

Some people don’t invest because they believe it’s too complicated.
Other people believe it is impossible for a normal person to succeed at it.
Other people think putting money in the stock market is the same as gambling. Make
one wrong choice and you lose all your money.

And it’s true, for many people investing really is like gambling. They try to guess which
stocks will rise in price and which ones will fall. It’s basically like trying to predict the
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future.

Tony’s strategy for investing in the stock market is totally different. He recommends that
you use index funds. This is the same strategy that billionaires like Warren Buffet, Peter
Lynch, and Ray Dalio recommend to regular people like you and me.

And when you know the right investing strategy, then there’s no reason to feel
overwhelmed or worried. In this book Tony Robbins explains the most important rules for
safe and profitable investing. He tells you exactly what to do to grow your wealth. He also
tells you what traps to watch out for to avoid losing money.

This isn’t a get rich quick scheme. It’s about creating a rock solid unshakeable
foundation of financial security underneath you and your family so you can live with
peace of mind.

And when you stick to these strategies, then soon your money will start to work for you
instead of you working for it. Tony calls it “making money your slave instead of being a
slave to money.” And there will come a moment in your life when you don’t ever need to
work again. And that’s a beautiful place to reach because it feels like freedom.
[key-point]Investing is for everyone, not just the ultra-rich. Investing is not gambling when
you follow the right rules. It can be a very safe way to grow your money.[/key-point]

2. Index Funds: The Simple and Safe Path to Wealth

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What is a stock? A stock is a small part of a company that anyone can buy and sell. For
example, you could buy 1% of Disney in stocks. If Disney became more successful, your
stock would also become more valuable. You could sell it for a higher price and become
richer.

Usually, people think investing is “stock picking.” They think you need to choose the right
stocks and you will either become rich or go bankrupt. But Tony’s strategy is totally
different.

Tony Robbins and the billionaires he interviewed recommend you put your money into index
funds.
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What are index funds?

When you invest in an index fund, you’re not picking just one stock. You’re actually
putting a small chunk of money into EVERY stock in a market.

For example, have you ever heard of the S&P 500? It’s a list of the 500 most popular stocks
in the US. This includes Apple, Google, Amazon, Facebook, and so on. So an “index fund” of
the S&P 500 lets you invest a small amount of money equally into all 500 companies at the
same time. Instead of picking one stock, you pick them all.

Why would anyone want to use index funds?

Because it’s incredibly hard to predict the future! As Tony says, “the world is just too
complex and fast-changing for anybody to see the future.” And the good news is, you don’t
need to!

Just put your money into an index fund and it will grow or shrink along with the overall
stock market. If one company goes bankrupt, you won’t lose a lot of money. You don’t have
to stress about picking the right stock.
[key-point]Forget about stock picking! Put your money into index funds. This means you’re
investing a little money into every company in the market! Your money will grow along with
the overall market and you don’t need to worry about individual companies going
bankrupt.[/key-point]

3. The Magic of Compound Interest

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How much will your money grow with index funds? Well, Investopedia says:

According to historical records, the average annual return for the S&P 500 since its
inception in 1928 through 2014 is approximately 10%.

That’s right. If you had invested in an S&P 500 index fund in the past, your money would
have grown about 10% per year on average. (Which is about 7% after inflation.)

If that sounds too good to be true, keep in mind this is a long-term average. There
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are years the stock market grows by 20-30%. Other years it stays the same size. And other
years your money may actually shrink by 10, 20 or as much as 40%! Ouch!!

So how do you know when is the right time to invest? You don’t. Almost nobody can
predict when the market will boom and when it will crash. That’s why Tony recommends
you view investing as a long-term project. You put your money in for 10, 20, 30 years or
longer. In the short term, you may lose money if there is a recession. But over the long term,
the growth will be about 10% per year.

Compound Interest

What is interest? That’s what investors call the money you make from investing. If your
money grew by 10%, then you can say that you “made 10% interest” this year.

If 10% interest doesn’t sound like much to you, then you don’t understand the power of
compound interest yet.

Compound interest is when you earn interest not just from the money you save…
but also from the money you made investing in the past. This is when investing really
starts to pay off. Over 30 years your interest “stacks” or “compounds” on top of itself and
your money grows a lot more than you expect.

Here’s a simple video explaining how compound interest works visually:

Here’s one of Tony’s examples to show how powerful compound interest is:

The S&P 500 returned an average of 10.28% a year from 1985 to 2015. (…)

Let’s say you’d invested $50,000 in 1985. How much would it have been worth by 2015?

The answer: $941,613.61. That’s right. Almost a million bucks!

That’s incredible! In fact, with 10.28% yearly growth, your money would double every
seven years thanks to compound interest.

Yet there’s a catch.

There’s always a catch isn’t there? We’ll talk about it in the next idea…
[key-point]Compound interest is when you earn interest not just from the money you save…
but also from the money you made investing in the past. It can make your money grow a lot
faster than you expect.[/key-point]
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4. Fees Are Your Biggest Enemy

Here’s the bad news from Tony…

But while the market returned 10.28% per year, Dalbar(a research firm) found that the
average investor made only 3.66% a year over those three decades! At that rate, your
money doubles only every 20 years. The result? Instead of that million-dollar windfall, you
ended up with only $146,996. (Emphasis added.)

Why is the return for average investors so much lower than it could be? One big
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reason is FEES.

If you went to someone who called themselves a “financial adviser,” you would expect them
to give you unbiased advice, right? After all, that’s what they get paid for!

Well, you may be shocked to hear that most people providing financial advice are
actually brokers or salespeople. They make big sales commissions when they recommend
certain products. And the bad news for you is the products THEY make big money
recommending are often not the ones you should be buying.

The Mistake of Mutual Funds

For example, financial advisers often recommend actively managed mutual funds. That’s the
opposite of an index fund. In a mutual fund, someone is actively picking stocks for you.

And in a perfect world, having an expert pick stocks for you should make you more money.
That’s why mutual funds charge high FEES of around 2% per year.

But the problem is mutual funds don’t perform! In reality, mutual funds do not grow
your money faster. They usually perform far worse than the overall market.

One of the most shocking studies I’ve seen on this topic of mutual fund performance was by
an industry expert named Robert Arnott, the founder of Research Affiliates. He studied all
203 actively managed mutual funds with at least $100 million in assets, tracking their
returns for the 15 years from 1984 through 1998. And you know what he found? Only 8 of
these 203 funds actually beat the S&P 500 index. That’s less than 4%! To put it
another way, 96% of these actively managed mutual funds failed to add any value at
all over 15 years!

It’s shocking that you need to pay 2% fees for mutual funds that usually make your money
grow LESS than if you had just put it into an index fund.

Only a tiny percentage of mutual funds beat the overall market. And remember that just
because a mutual fund has done well in the past, doesn’t mean it will continue to perform
well in the future. As Tony repeated many times in this book, “Today’s winners are often
tomorrow’s losers.”

Well, you might be thinking “a 2% fee doesn’t sound like much.”

But when you consider that your average yearly interest may be about 7%, that 2% is a big
chunk of your interest. And over 20, 30 and 50 years, the effect of that 2% will compound
and steal a large part of your wealth.

When Tony talked to investing legend Jack Bogle, he heard the negative impact of these fees
explained clearly:
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“Let’s assume the stock market gives a 7% return over 50 years,” he began. At that rate,
because of the power of compounding, “each dollar goes up to 30 dollars.”

But the average fund charges you about 2% per year in costs, which drops your average
annual return to 5%. At that rate, “you get 10 dollars. So 10 dollars versus 30 dollars. You
put up 100% of the capital, you took 100% of the risk, and you got 33% of the return!”

So what can you do? You can listen to the world’s top investors like Warren Buffet, Jack
Bogle, and Ray Dalio who all recommend investing in index funds.

Index funds have far lower fees, usually less than 0.5%. Why are index funds so
cheap?

1. They’re mostly automated. Index funds don’t need to pay anyone high salaries to
pick stocks and manage the fund.
2. No sales commissions. The low fees aren’t very profitable for banks, so financial
advisers don’t make big commissions selling index funds.
3. Fewer trading fees. When mutual funds buy or sell a stock, they pay a trading fee.
And the more they trade, the more YOU pay. These costs add up, eating into your
returns. Index funds buy and hold the same stocks for years and decades, so there
are far fewer trading fees.

More and more people are catching on to the benefits of investing in index funds instead of
traditional mutual funds. According to the Wall Street Journal, people moved over
$400 billion into index funds in 2016, a new record. And I’m sure that will continue to
grow.
[key-point]Most financial advisors are more like commissioned salespeople, often
recommending mutual funds with high fees. But mutual funds usually perform worse than
index funds. And their 2% annual fees don’t sound like much, but could cost you a few years
of retirement![/key-point]

5. Market Falls Are Normal and Predictable. Don’t Be

Afraid.
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I want you to imagine that you kept all of your money under your bed. All the money that
you have worked years to save is sitting in a big pile of cash, safe inside your room.

Then one day you look under your bed and see that 10% of your money is missing! It might
take you a year to save that much money again!

How would you feel in this situation? Probably angry, shocked and upset. You want to find
out who took your money!

Here’s a fact: losing 10% of your money overnight is not an unusual event in the investing
world. It happens all the time. Here’s a quote from Tony:
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When any market falls by at least 10% from its peak, it’s called a correction—a peculiarly
bland and neutral term for an experience that most people relish about as much as dental
surgery! When a market falls by at least 20% from its peak, it’s called a bear market.

It’s easy for us to sit here and imagine that we will stay calm during the next market
correction or crash, but when you wake up one morning and see that you’ve lost a big chunk
of your wealth then your emotions start to take over. When the market starts going down,
everyone starts feeling a bit worried and anxious about the future. Everyone feels afraid to
lose the money they’ve spent years gathering.

When fear takes over, this is when people make bad investing decisions at the
wrong time. Decisions that may totally derail their long-term investing goals. If you make
an investing decision out of fear, like selling your investments because the market is going
down… then you will lose even more money.

So how can someone stay sane and rational? By learning about the reality of the markets.
The first reality is:

A market correction has happened about every year since 1900.

That’s right!

Market corrections happen once a year on average. Yet if you turn on the TV during a
correction, the talking heads on the news are moaning about how this is the end. During
every correction, attention-hungry media professionals start telling us that this is the next
Great Depression.

That’s just their job. To scare people so much that their eyes become permanently glued to
the news. To spin any news in the most negative way possible. Then they sell your attention
to advertisers. That’s their job.

But when you know the REALITY of how the markets work, their brainwashing will not
affect you. And their fear-mongering will not change your investing strategy. Here’s another
reality of the markets:

Only 1 in 5 corrections turn into a Bear Market. Bear Markets happen every 3-5
years on average.

Remember that a bear market is when the market falls by 20% from its peak. These are like
larger “corrections” and they happen every 3-5 years on average. Most corrections DO NOT
turn into bear markets.

It’s not a question of IF these falls will happen, it’s a question of WHEN.

We know they will happen.

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We know how often they will happen.

We just don’t know exactly when they will happen.

So there’s no sense in changing your investment strategy when the market goes down.
Because it has always bounced back after every correction and crash. Always.
[key-point]When the market falls by 10%, it is called a market correction. These happen
once a year on average. When the market falls by 20%, it is called a Bear Market. These
happen every 3 to 5 years on average. These market falls are normal and predictable, don’t
let it scare you to sell your investments at the wrong time. [/key-point]

6. The Market Has Always Bounced Back. Always.

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Do you remember the big financial crisis in 2008? Big institutions like the Lehman
Brothers were going bankrupt, billions of dollars were spent by the government to bail out big
banks, people were losing their houses. The stock market took a nosedive. From October
2007 to March 2009, the S&P 500 market lost about 50% of its value.

Yet looked at what happened next.

Starting in March 2009 and over the next 7 years, the economy bounced back. The
S&P 500 more than tripled in value, earning back every dollar it lost in the crisis,
then shooting to new peaks.
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(Source of graph.)

So the worst thing you could have done was sold your investments in March 2009. The best
thing you could have done was hold onto your investments until the market
recovered. Just like it always has.

Every time the market falls, all the talking heads on TV start persuading everyone that “this
time it’s different.” They talk as if the apocalypse has come and the economy will never get
better. But Tony says it very clearly:

Bear markets don’t last. On average, they last about a year. (…)
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In more than a third of bear markets, the index plunged by more than 40%. I’m not going to
sugarcoat this. If you’re someone who panics, sells everything in the midst of this mayhem,
and locks in a loss of more than 40%, you’re going to feel like a grizzly bear mauled you for
real.

Obviously, the future isn’t going to be exactly like the past, but when we look at the past you
will see familiar patterns repeating for hundreds of years. Bear markets have happened
many times before. And when they do happen, the worst thing you could do was sell when
stock prices are low. Here’s another reality you need to know:

Despite many short-term drops, the stock market rises over the long-term.

If you do what Tony recommends and stay in the market over the long term—10, 20, 30
years—then market corrections will only be short-term setbacks. The money you lose in
market drops will come back if you stay in the market and wait a few years. And over the
long-term, you will become richer.

Now here’s what you should REALLY do when there is a market correction or bear market:

7. “Be Greedy When Others Are Fearful” – Warren

Buffett
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In 2009 when the stock market was falling fast, Warren Buffet was buying billions
of dollars of stocks. Think about that. While other people were losing their minds with
panic, the richest investor in the world was going on a shopping spree!

It was all part of his strategy. Here’s a quote from Buffett during the 2008 financial crisis:

“A simple rule dictates my buying: be fearful when others are greedy, and be greedy when
others are fearful. And most certainly, fear is now widespread.” – Warren Buffet

For example, in 2009 he bought a railroad company called BNSF for $26.5 billion. Most people
couldn’t believe he was spending billions of dollars buying companies in the middle of an
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economic crash.

But now that railroad company has turned into one of his most profitable deals.
Revenues have gone up over 58% since he bought it and he’s made almost all of his money
back in just a few years. Now people say he basically stole the company because of how
cheap he bought it for.

A Nobel prize-winning economist called Harry Markowitz said:

“The biggest mistake that the small investor makes is to buy when the market is going up on
the assumption that the market will go up further—and sell when the market is going down
on the assumption that it’s going to go down further.”

Most people live in fear of bear markets and crashes, but the wealthiest and
smartest investors look forward to them! Why? Because that’s when everything
goes on sale! Market drops are an incredible opportunity to buy stocks at a discount price.
When everyone is feeling pessimistic about the future and selling their investments at low
prices, that’s the time for you to get in!
[key-point]The best time to buy is during bear markets and crashes because that’s when
everything goes on sale. This is the opposite of what most small investors do.[/key-point]

8. Diversification: How to Avoid Losing Money Even

During Crashes
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Most people believe top investors are obsessed with making money. Tony Robbins says this
is not true. After talking to them he found that…

The best investors are obsessed with avoiding losing money.

Warren Buffet even has a famous line about his first two rules of investing. He says: “Rule
number one: never lose money. Rule number two: never forget rule number one.”

Here’s an example from Richard Branson. Most people think Branson is a crazy risk-taking
entrepreneur. Yet when he started Virgin Airlines, he risked very little money. Branson
knew that airlines go bankrupt all the time, so he spent a year negotiating a deal
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with an airplane company that would let him return the planes if Virgin airlines
failed. With this deal, he now had the opportunity to build a huge business, but he wouldn’t
lose much money if it didn’t work out.

This is an example of a “No Lose Situation.” And you should try to create these types of
situations in your investing. Ask yourself: “How can I avoid losing money even if I’m
wrong?” That’s how the most successful investors think.

One way to do this is through…

Diversification

We’ve all heard the that you “Shouldn’t put all your eggs in one basket.” Because you could
fall and break all your eggs. And if all your money is in one type of investment, then you
could lose it more easily too.

Smart investing means having your money in many different types of investments, so that
when the value of one goes down, the value of others remains the same or even
grows.

Diversification is an admission that you don’t know which particular asset class, which stock
or bond, or which country will do best. So you own a bit of everything!

For example, from the years 2000 to 2009, the US stock market barely grew at all. The S&P
500 brought a return of just 1.4% per year on average. Many people call those years “the
lost decade” because if all your money was in US stocks, you would have lost 10 years of
growth!

Yet during the same time, international stocks grew 3.9% per year and emerging-
market stocks grew 16.2% per year. This means if your money was spread around the
world, then it wouldn’t have been a lost decade for you. That’s why diversification is so
powerful.

Here are a few ways you can diversify:

1. Use index funds. With index funds, you’re not betting your money on one company or
one CEO. You’re spreading it across the entire market.
2. Choose different types of investments. I’m talking about stocks, bonds, real estate,
etc. As the billionaire Ray Dalio warned Tony, “It’s almost certain that whatever asset
class you’re going to put your money in, there will come a day when you will lose
50%–70%.”
3. Spread your money across many countries and economies. You never know when
one country will run into trouble. For example, the Japanese stock market looked
unstoppable in the 80s, then it suddenly fell and hasn’t really grown for 30 years. The
Japanese investors who kept all their money inside their country are not happy.
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4. Buy investments over time. Nobody really knows when the best time to buy is, but if
you’re purchasing your investments over time, then at least you can avoid buying too
much at the worst time. (This is also called dollar cost averaging.)

[key-point]The best investors diversify. This means they don’t risk all their money on one
stock, one type of investment, or one country. This allows your money to continue growing
even when one part of the economy has a setback.[/key-point]

9. True Wealth is Emotional Wealth

Tony believes this is the most important part of the book.

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Yes, we’ve just spent a long time talking about how to achieve financial freedom and
material success. But now Tony wants us to see a deeper truth:

What we really want are the emotions we associate with money: for example, the sense of
freedom, security, or comfort we believe money will give us, or the joy that comes from
sharing our wealth.

Many people get money, but they don’t feel different. Some of the richest people in the
world still live in worry and fear they could lose everything. They feel unsatisfied when they
wake up in the morning. Is that wealth?

Tony says that to really feel wealthy, you must take care of your emotions. And he gives us a
couple ways to do this:

First, Tony says you must keep growing. Everything in life is either growing, or it’s dying.
You must keep growing to avoid feeling miserable and unfulfilled.

Phil Knight who created Nike also says that “Life is growth. You grow or you die.” And Phil
says that the most meaningful times of his life were when he was struggling to grow Nike,
like the years he was selling shoes from the back of his car. I highly recommend you click
here to read my summary of Phil Knight’s book.

Second, you have to give. Give your money, your time, your attention to others.
Contributing to others is what brings meaning into most people’s lives.
[key-point]People don’t really want money, they want the feelings that money can bring
them like security and freedom. But many people who are rich still live with fear and
anxiety. So the real key to a meaningful life is emotional wealth. You get this by constantly
growing, giving to others, and following the next step…[/key-point]

10. How to Stop Suffering and Live in a Beautiful State

All the Time
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The final step of emotional wealth is the most important one.

You have to choose not to suffer.

I can hear you asking: “Not to suffer? I thought this was a book about investing!” Well, Tony
Robbins wants to help us become emotionally wealthy, too.

Tony explains that at any moment in our lives we are either living in a high energy state or a
low energy state.
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High energy states could also be called “beautiful states” and it’s when you feel joy,
happiness, passion, connection or excitement.
Low energy states could also be called “suffering states” and it’s when you feel
boredom, depression, misery, hopelessness or stress.

Of course, we all want to live in beautiful states, right? Who would choose to feel angry, sad
or hopeless? But Tony says this is exactly what we do whenever we slip into a suffering
state. Good events don’t put you into a beautiful state. Bad events don’t put you into a
suffering state. It’s YOU who chooses to feel the way you do.

You must realize that you are in control of your inner state, not the world. And at
this point Tony is sounding a lot like Buddha. Here’s another quote from the book:

What I’ve come to realize is that the single most important decision in life is this: Are you
committed to being happy, no matter what happens to you?

Will you commit to enjoying life not only when everything goes your way but also when
everything goes against you, when injustice happens, when someone screws you over, when
you lose something or someone you love, or when nobody seems to understand or
appreciate you? Unless we make this definitive decision to stop suffering and live in a
beautiful state, our survival minds will create suffering whenever our desires, expectations,
or preferences are not met. What a waste of so much of our lives!

Don’t worry, it’s not your fault!

The human brain is engineered to make you survive, not to make you happy. Our
brains are actually wired to look for what’s wrong in our lives. This wiring comes from times
when cavemen had to scan their environments for saber-toothed tigers. We don’t live
around tigers anymore, but humans are still always scanning for threats, by worrying about
what you might lose in the future. You hear bad news about the economy. That’s a threat.
And this puts you into a suffering state.

So what can we do instead?

When Tony Robbins feels himself slipping into a suffering state, first he breathes
and slows down. This creates some distance between him and the thoughts that are pulling
him into suffering, and now he can redirect his focus more easily.

What does he redirect his focus to? Gratitude and appreciation.

The way you overcome your caveman wiring is through appreciation. Rarely do we stop to
enjoy all the good things in life. We take them for granted and obsess over problems or what
we desire. However, when you do slow down and feel grateful for what you have—shelter, a
friend, a lover, a family member, safety, technology—whatever it is, you almost immediately
go into a beautiful state.
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To overcome fear, the best thing is to be overwhelmingly grateful. —Sir John Templeton

Here’s a video of Tony guiding you through a meditation that will show you how to access a
beautiful state whenever you want:

[key-point]We are always living in either a suffering state or a beautiful state. Most people
believe the outside world causes them to feel good or bad. The truth is that you have to
choose not to suffer. Focusing on everything you’re grateful for is the quickest way to end
suffering.[/key-point]

Conclusion

That is all for this summary of Tony’s latest book about money. We’ve covered some
important truths about investing that will prepare you for a wealthy future.

Not only did we talk about the fundamentals of investing like why you should use index
funds and diversify. We also talked about the emotional realities of investing and how fear
will sabotage most people’s long-term investing strategy.

Nobody can really predict when the markets will go up or down, so it’s best to invest your
money for the long term. This is called a “buy and hold” strategy. Over the years your
savings will multiply faster and faster, thanks to the amazing power of compound interest.

We also discovered that the BEST time to buy investments is when everybody is feeling
afraid and pessimistic. Because that’s when everything goes on sale! Market crashes are
your best opportunity to move up a tax bracket.

Finally, we talked about true wealth, which is not financial but emotional. There are
billionaires in the world who are stressed and miserable. What a tragedy! And there are
other people who are wealthy on the outside AND the inside because they are
committed to living in a beautiful state, no matter what happens. They have chosen
to live with gratitude and appreciation for what they have instead of always obsessing about
what else they need.

That’s true wealth, and that’s how you become totally unshakeable.