When 2008 happened, and I grew up with a lot of suffering. I’m not some great special person. I just hate suffering for others, because I know what it feels like. There was so much suffering and even financially successful people, but also watching people losing their homes, watching people lose 50% of their entire retirement nest egg overnight. It was so preventable. It just made me crazy. 

I did incredibly well during that time, as you guys know. When things melt down, you can actually get there faster than when they’re growing. If you keep your head together, you know what you’re doing. I’ve worked with some of the smartest people on earth in this area.  

I just felt like somebody’s got to do something. Two years later, still, nothing was done. I saw a documentary that won an Academy Award, and it was all about the financial crisis. It systematically showed how few people almost destroyed the entire world economy. Then, the punishment was we gave them more of our money, just like that. 

At the end of this thing, you’re either totally depressed or you’re totally angry. I wasn’t on the angry side because the press doesn’t change anything. I thought, “Okay, I got to convert this energy into something productive. What can I do as one person?”

I’m not special, but I have a special connection, which is, I know some of the smartest financial people on earth. What if I interviewed 50 of them and I brought to the table the best financial minds on Earth. Nobody from the lucky sperm club, everybody who built it from nothing.

I got access to Warren Buffett, Jack Bogle, David Swensen and Carl Icahn. All these people. Ray Dalio, the smartest guys in the room. Then they started referring to me and I got deeper and deeper in that group.  

I then wrote this 670-page crazy book, as you described, “Money: Master the Game”. The reason I wrote this book is I thought we had the longest now officially longest bull market in our history. Obviously, a correction is coming and you get a correction every year, but a bear is going to be here at some point. 

I want to make sure people are prepared and realize that’s the greatest time of their life. I wanted to be able to take a millennial who thinks they have so much that they can never be out of it and show them on a weekend… Read a playbook of here’s how to go from where you are to where you really want to be.

Take a baby boomer who thinks, “I started too late. I can never get financially secure,” then show them how they can do it. That was the impetus for “Unshakeable.” 

Another thing is I don’t need 100% of the profits to feed people, because when I was 11, there was no money and no food when I was fed. I fed two families at 17, and I got it to 200,000 people. A million a year formula. Now, we feed 100 million people a year. 

For the last four years, 400 million people don’t want to feed a billion over the next six years. Hundreds of these profits help us make that happen as well so people can change their own life, and we feed 50 families with every book as well.

Preston Pysh  6:17  

Tony, my favorite part about your entire response there is right at the end. It’s for multiple reasons, not just the impact, which is somewhat mind boggling to think that you are going to be able to feed a billion people, but I think for the person that’s listening to this and wondering about the information they’re about to receive… 

When a person says that they give all the proceeds of the book away to a charity, you are incentivized to tell the truth and to provide the best information you can provide. That is not how a lot of the finance industry is structured. I think that that is such an important part for people to takeaway from this is that you are not incentivized.

Buffet had a quote when we heard him at the last shareholders meeting. He said, “You show me the incentive and I can show you the action or the reaction.” 

I’ll tell you what your incentives for this are really in the right place. Let me just throw this out there, and I’m sorry to be talking so much, because we want to hear from you. But feedamerica.org/TonyRobbins, if you want to participate in this and help Tony achieve this goal of feeding a billion people. We will have a link to that in our show notes. 

Tony Robbins  7:31  

Thank you for that. I just want to plant a seed and that is if they just buy the book, I’ll feed 50 families, but if they want to join me, we have 49 million people in the richest country in the world that wake up every morning not knowing where their next meal is going to come from. 17 million are children, so that’s not a statistic to me, because I was one of those. It’s not like I’m some good person. I’ve suffered enough that I don’t want anybody else to suffer. 

However, if you donate $100, or a million dollars, up to $4 million I match every year, so there’s no limit other than four million bucks. If you can put 10 bucks in, and I will match it. It will double your impact. You can also put no money in and just get the book, and I will feed 50 families. 

I hope people who care about this issue, not everybody does, but they do, double your impact and join me in this. I’ll match you on whatever you do.

Stig Brodersen  8:14  

Tony, I really love how you include yourself and your own story in your response there because it is no secret for those of us who have been following your career, that financially, you have the deck stacked against you in your early life. 

Talk to us about how your life was in the early years. Then, what has happened since and we know there have been quite a few things that have happened since, but your personal journey to where you are today in your own words. How did this happen?

Tony Robbins  8:45  

I always tell people you overestimate. Most of us overestimate what we can do in a year. Then, we’re disappointed. However, we underestimate what we can do in a decade of growth, or in my case, four decades of growth, right?

There have been a lot of stages along the way but I grew up in a family where I had an incredible mother. I have a younger brother and a younger sister, five and seven years younger.  

I was kind of an adult in the room and my mom was a good human being, but a troubled lady. She abused alcohol and prescription drugs. She got a little crazy. So she would smash my head against the wall. I bled. She would pour liquid soap down my throat because she thought I was lying. I threw up and I wasn’t lying. 

When somebody who you love is trying to harm you, and yet you still know they love you, it messes with your head a little bit. However, I finally figured out I need to become a practical psychologist. I need to be able to predict her moods and change them. I need to understand what was driving her. 

Much of who I am, I often say that if my mother had been the woman I hope she was, I wouldn’t be the man I’m proud to be. I’m truly grateful to her because she did the best she could do. She really did love me but she had huge problems and I had to learn to separate people’s behavior from who they are because otherwise I’d go crazy. 

That helps me today when somebody behaves insanely, meanly, and harshly, I know that is not their soul and their spirit. That’s their behavior. That helped me to be able to help other people. I think along the way, I learned that if I could keep learning, if I could become a learning machine that any problem I could solve, any problem I had, if I could solve it for me, I could solve it for tens of thousands and hundreds of thousands. 

My path has been really just constant growth. I took a speed reading course when I was 17. I said, “Leaders are readers.” I want to compress decades into days. If I can take 30 years of a guy’s life and I can compress it down to the most important insights, I can save a whole lot of time and serve a lot of people, including myself. 

I didn’t read a book a day, but for seven years, I read 700 books in the era of human development, psychology, physiology, and pretty soon you recognize that everything is a pattern. 

For example, your financial orientation, it’s all pattern recognition, pattern utilization, and really smart pattern creation. That’s what makes somebody brilliant in any field and certainly in finance. 

I then got really good at recognizing that everything is a pattern with human beings and that there are patterns that make you angry. There are patterns that make you sad, patterns that make you grateful, and patterns that make you excited. 

If you think it’s you, it’s hard to change you, but if you realize there’s this pattern, you can change anything. Once I understood that, my capacity grew. By being put on the line with no net, for decades, you tend to grow. 

If you’re passionate about constantly getting better, you expand. Over those decades, that’s happened. Then I began to grow companies because early on I realized my ideas are going to die on my lips, unless I learned to grow, build a company, and develop innovation and marketing. I had none of those skills and I was terrible, but I created raving fan clients, which made up for my education and the business side.

Now I’m privileged enough to have 54 companies, where 12 of them I actively manage. We do over 6 billion in business in 14 different industries, as unique as stem cells to… I’m one of the owners, the LEFC. I have an Esports team. I love to light people up. I love to arm people with strategies and tools that give them control their own life.Finance is one of those areas.

Preston Pysh  12:05  

Tony, what I captured at the start of what you were saying is so important. There was a book by Carol Dweck. She’s out of Stanford. 

Tony Robbins  12:15  

I’m familiar with her. She’s great.

Preston Pysh  12:16  

Yeah, the book “Mindset.” When you were talking about your quote there where you said, “If I didn’t have the mother that raised me that way, I wouldn’t have become the man that I became.” 

It takes a person with a growth mindset to be able to understand that and not really play the victim card because so many people that are going through a rough upbringing like that are saying, “Well, I can’t succeed because I’m a victim or I was treated this way.”

I can only imagine how hard it is to teach yourself or train your mind to think you are not a victim. This is an asset in some way. 

How does a person go about doing that? I can’t wrap my head around how a person can make that transition without coaching or having some positive influence in their life. For you at that early age, how did you make that transition of the mindset?

Tony Robbins  13:13  

I think it honestly was reading biographies and autobiographies en masse, meaning, some of the most brilliant humans in history and I’m reading their stories. I went from feeling sorry for myself to going, “This is part of the path to growth. This is part of the path to becoming a person who has influence and impact in a beautiful way in the world,” because virtually every story I read….

Churchill came from a very privileged background, but the hell that man went through in order to try and save his country and turn the world around is just extraordinary. You read stories and all of a sudden, I couldn’t tell myself the story of the victim anymore.  

I think the other reason is because as a victim I can’t help anybody. I’ve always had this internal drive. I just love human beings. I love to see them feel fully alive. I hate to see them in pain. So if I’m a victim, then my life is over. 

Most people pick the victim approach not because they’re victim-oriented, but because they’re just scared. We’re all definitely afraid we’re not enough. I’ve never met anybody, presidents of countries, billionaires, we all have a place we feel we’re not smart enough, rich enough, young enough, old enough, and sexy enough. I don’t know anything enough. We feel like you’re not enough to deepen fears and that you won’t be loved. 

Love is the oxygen of life so most of us, especially in social media, are trying to constantly prove that we’re somebody special.

I have a friend that’s got one of the top gyms here in South Florida. He told me, “Tony, every single day people come in, men and women, who take a bunch of pictures and don’t work out.” They just post it because they just want to project this image.” 

It’s scary because the only way you have self-esteem is by making yourself do incredibly difficult things. Things that no one else can know but you know. Pride comes pushing through, it doesn’t come from ease. The path of least resistance will never make you proud. It will never make you strong and fulfilled. It will make you weak. 

For me early on, an approach to being a victim, it doesn’t mean your life would have no meaning. It means that you could point to something and say, “That’s why my life is this way. It’s not me, there’s nothing wrong with me, you can still love me.” But who wants to live that way?

I didn’t have role models, but I had role models through books. Books allowed me to transport myself to World War Two, to another time, to another history, and to another way of thinking person. It’s possible when you read an autobiography where the author themselves wrote it. You think like the author as you do that. 

So if you keep reading those things, you get the pattern of thinking of some of the most brilliant minds on the planet. My whole thing is my original teacher was Jim Rohn. He used to say, “Miss a meal, Tony, but don’t miss reading 30 minutes a day.” I don’t mean clickbait. I don’t mean some blog. I mean, like a real book, or something that’s got strategy or philosophy that can help you to change your life or help someone else. 

That obsession for decades has served me really well. 

The other thing I learned early on that life is worthless if it’s just about you. It’s not about me, it’s about “we.” This whole “me” mindset that we have today, like, “What am I getting? What am I not getting? Who’s hurt me?” 

They don’t usually ask that because everybody’s hurt somebody. You may have been hurt by somebody, but that’s life. Step up and grow. 

I think the biggest thing is early on I realized that life is about adding value. It’s not just business. You can’t get wealthy, financially without adding value. Even as an investor, you’re providing capital to the right places and if they add enough value, you’re going to win. 

If you can do more for other people, in your life, in your relationships in your business, you’re going to prosper. You’re going to build beautiful relationships and beautiful business. It is going to be a beautiful life. There is no substitute for adding more value than anybody else and constantly improving the way you add that value. 

If it’s in business, you have to also market that value because you’re going to have the best product. However, if you don’t get it out to people where they want it, it dies on your lips. I think it’s a combination of those things that helped shape me.

Stig Brodersen  17:10  

Tony, we actually invited you here on The Investor’s Podcast to talk about your new book “Unshakeable.” It seems we’re talking about everything aside from that. Sorry about it. 

Here’s another question that’s not about the book. With your knowledge and with your extensive set of skills and everything that you have experienced, if you had to go back and get a piece of advice and do that to yourself when you were 20, 30, 40 and 50, respectively. Here’s the kicker, it has to be the same advice. Regardless of where we are in life and regardless of the age we are, what would it be?

Tony Robbins  17:52  

That’s a great question. That’s an interesting question. I wouldn’t necessarily think that every age it’s the same advice, but sometimes repetition is the mother skill. If I had one piece, it would be, “Add more value.” It’s my mantra. It’s my obsession. How can I do more for others?

That’s not just because I’m a good person or something. I think I am a good human being but it’s really because that’s the only thing that is fulfilling. 

What makes you fulfilled is growing and giving. If you’re not growing, I don’t care how many trophies you have. I don’t care how many millions of people love you. I don’t care how much money you got or how many Academy Awards you have, or whatever your way of measuring is. You’re not going to be happy. 

How many people have you seen that are incredibly wealthy and have honored in every way, millions of people love them, and then they kill themselves? Because they stopped growing. 

Then growth gives us the opportunity to give and I think everybody can be selfish. But when people say human beings are selfish, we can be selfish. I’ve certainly been selfish, but that’s not who we are. My proof to that would be look what people do when they have a great experience when something transforms you, when something is so joyous, the first thing we want to do is share with somebody we love. 

Why is that? Because you can only have so much pleasure in the body by yourself. Achievements, success, money, drugs, alcohol, rock’n’roll, whatever it is that floats your boat. However, there’s only so much we can hold inside but when we grow and we give something, then our life has a different form of meaning. It’s not about just being happy every moment. If you’re happy every moment, your face hurts. We’ve all experienced that but what you want is meaning in life. I’m pretty obsessed with trying to bring that to people as much as I possibly can.

Preston Pysh  19:27  

I love it, Tony. Such awesome information. It pains me to transition away from such deep thought and such motivation for people. Stig and I just love finance too much to stay off.

Tony Robbins  19:42  

I don’t care who you are. Finance isn’t everything but when people are struggling financially, they have problems in their relationship. They snap at their kids and they feel bad about it. 

When they struggle financially, they beat themself up internally. When they struggle financially, it affects them physically. So I think this is one of the areas of the body like emotions, relationships, spirit… It’s one of the areas we got to master.

I’m grateful you guys are doing this and I’m grateful so many people listen to you, because I know you guys, both minds and hearts and the way you move, the way you teach is not for your own personal gain. 

There’s nothing wrong with people gaining from their business. Don’t get me wrong, but I know your true incentives because I’ve listened to a couple of podcasts and I’ve read about some things you guys have written. I’ve talked to people that have interacted in your shows and they all talk about your absolute sincerity and your desire to serve. That’s why I feel like we’re brothers on the path.

Preston Pysh  20:31  

I can’t tell you how much that means. That just made my month. 

Tony, in your book, the first time I read through this, and I’m going to hold this up to the screen so you can see my yellow highlight here. My dog tagged my earmarked page for this particular quote, because I loved this quote and this came from Jack Bogle in your book. The end of the quote says you put up 100% of the capital. You took 100% of the risk and you got 33% of the return. Explain to our audience with Jack’s talking about here in your book.

Tony Robbins  21:08  

First of all, this is what I was saying earlier about the system. I mean, when I met Jack, one of the first things he said to me is this…

He invited me for 30 minutes and I was there for four and a half hours. He had a quote saying, “I invited Tony over for 20 minutes or 30 minutes. Then four hours later, I have the most intense interview of my 65-year career.” 

We became good friends. One of the things he said to me was, “Tony, you really  educate people. If you’re going to make a difference, you’ve got to show people the impact of fees, especially in the 401k space everywhere. But in the 401k space, because that’s where 90% of Americans have their money. It’s in their home and it’s in their 401k space. The abuse in the system is just insane.” 

Before I answer your question, let me give people a context. There are these companies. Imagine they take 401k where everybody puts their money and the majority of Americans put their money. It’s a $6 trillion industry. 

Up until four years ago, they didn’t have to tell you what they’re charging you. What industry on the face of the earth can take your money without telling you what it is and you accept it. As a result of that, 71% of Americans still think their 401k has no fees. There’s no bigger lie on the planet.

Almost five years ago, the Department of Labor changed the rule and said, “You have to show people what they’re being charged.” How did the industry respond? They’re not going to give up this cash flow. We come up with 30 to 50 page disclosure documents that if you got a PhD in finance, maybe after four hours, you can find all the hidden fees which are usually about 17 of them.

Forbes put out an article that shows the average person in their 401k is paying 3.25%. They’ll get Vanguard and they’ll charge you 2.5 points, hidden inside their management fees they call it. Vanguard you can get 5 basis points, five one hundredths of a percent for those who understand what I’m talking about. 

Imagine, do you want to buy a Honda Accord for $30,000? Would you rather pay $800,000 to the same car? There are people living next door to each other, paying thousands percent more than the person next door for the same product. You can follow this if you wake up. 

Here’s what Jack was explaining. The average fees, Jack went really conservative. He said, “What if the average is only 2.5% because I know there are more?”

Well, let’s be super conservative, over an investor’s lifetime, that puts 80% of the compounded returns in the hands of the manager, not the investor. Yet most people put their money in a mutual fund. 

What happens is 96% of all mutual funds don’t match the market. They fail to match the market. So you’re paying all these fees for nothing for underperformance. It’s going to somebody who’s not doing anything to your advantage. 

Here’s how it works. I’ll give you the math now. Think of it this way. Let’s assume that you make a one time investment of $10,000 at age 20. It’s going to grow in the market. It’s 7%. The market has produced 8% of the last 20 years. We call it  7% to be conservative. 

He said, “You know by time you get to retirement age like me, that’s $574,464. But if you pay 2.5% in fees, and most people are paying 3.5, the total management fees and the other expenses also compound. So, you don’t end up with $574,000. You end up with #140,000 in the same period. 

You put up 100%, the company took 100% of the risk. They got $439,000, you got 140 grand. 77% of your returns are going to somebody else who’s usually underperforming. It’s insane.”

So, this is the big underpinning that if you talk to somebody like Jack Bogle or David Swensen at Yale, who’s the greatest institutional investor of all time, he’ll tell you that the greatest ripoff on the planet are these mutual funds. It’s all because there’s no way they can beat the market after fees. It just doesn’t matter how smart these guys are, and they’re not that smart. 

You look at the hedge fund industry. I mean, it’s been decimated in the last six or seven years because it doesn’t match the market. They charge 2% plus 20% of profits, the biggest scam on the planet unless you got to Ray Dalio, Carl Icahn, or Warren Buffett. Outside of those guys, there are a few players that are unicorns in the whole world. The rest of them do not win over time.

Stig Brodersen  25:14  

Tony in continuation of that discussion, I’d like to talk to you about your first book, “Money: Master the Game” back from 2015. One of the key concepts that Preston and I took away from that book was Ray Dalio’s All Weather Portfolio mix. You talk about how stocks were only one among several asset classes. 

Now in “Unshakeable,” the main focus is on stocks, even though you also briefly mentioned other asset classes and how you can mix that into a portfolio. But regardless what has changed, if anything in the markets and say you are a *inaudible* invest, and then you do not follow the market like on a day-to-day or even a year-by-year basis, but you just want the passive approach. What should you do?

Tony Robbins  26:02  

I just interviewed Ray Dalio again yesterday. Ray’s a dear friend now. For people who don’t know Ray, most your audience probably does. You think about investors. He is one of the most successful investors in the history of the world and one of the most successful hedge fund investors in the history of the world. He returned more capital to investors than anyone alive. So, pretty brilliant man. 

He just wrote a book that your audience would probably enjoy. If they go to principles.com. He wrote a book called “Principles,” but he has a new book that is on the market crashes. It’s really a template of all the market crashes in the last hundred years. He shows how he navigated in 2008, not so many other times successfully when everybody else was decimated. 

I think if they want to go deeper than my conversation, Ray’s a good place to go. The reason I put less of him in “Unshakeable” is just I wanted to go from 760 pages down to 250 that you could do in a weekend. I still mention it but yes, the market is highly valued right now.

However, here’s what I’ve learned for context, I think is really important. Nobody successfully called the market over time. Nobody.

Warren Buffett is not a market guy. He’s a value guy. He will tell you he is going to be wrong. Every one of the smartest men in the room, they’re not the CNBC commentators who will tell you they know what they’re doing. Every one of them says, “Here’s what I think, but I know I’m going to be wrong.”

They do four things and then I want to create context for you. Ray Dalio is a completely different investor than Jack Bogle, David Swensen, Ben Bernanke, and Carl Icahn. They all do it differently. 

What they all have in common are four things. One, they all are obsessed with not losing money. They don’t do that by trying to time the market. If you talked to Ray right now… 

Yesterday, he told me, “Listen, where we are in the business cycle. I could be wrong, but I don’t see 2008. Here’s why. But I do know in the next two, probably maybe three years, we’re going to have a significant correction because that’s the business cycle and this one’s been extended for a long time.”

Then he gave us all the reasons, but he could be dead wrong. He knows he could be dead wrong. So the way they defend that is what I teach is the most important financial decision is to become an investor and to become an owner, not just a consumer. 

The most important investment decision bar none, that everyone of these men and women agree with: the way you protect yourself is asset allocation.

As Ray said it, “Everybody has a favorite investment.” If you grew up as a kid and your family was constantly rehaving homes to try to make money. In real estate, you’re good because you were reinforced forever. If somebody gave you a stock at 12, and you still own it, yours *inaudible*. 

I don’t care what asset class you have and how smart you are, or how well you’ve done over time, there is a day when every asset class will drop 5% to 70%. If that’s later in your life, you’re completely screwed. 

We all know that we have to diversify, but it’s really how much goes in risk assets where the upside is unlimited, but the downside is unlimited. What percentage of those assets go in less risky environments that have less return, but through time can still compound?

What’s your risk tolerance? How much access? Do you have cash flow? These are factors that influence that.

The first thing is most investors are obsessed with trying to make money. These guys, to a man and to a woman, are obsessed with not losing money because they know if they lose 50% in the market, it doesn’t take 50% to get even. 

If you had a 100 grand, you ask the average person, “You lost 50%. How much do you have to get it back?” I’ll say 50%. 

No. If you had 100 grand and it dropped to 50, now you do 50% improvement, you’re at 75. You’re still 25,000 in the hole. It takes 100% improvement. These guys know that and they defend it by asset allocation because they know they’re going to be wrong. 

Second, they’re all obsessed with this whole concept of how do I get the least amount of risk with the most amount of return? This mindset, most people think billionaires are people who took gigantic risks and they got lucky or they had balls of steel, intestinal fortitude. That’s not how 99% of them do it. 

They all do this by looking at things and saying, “I want to have a risk ratio where I am really asymmetrical. I have an asymmetrical risk-reward. Very little risk with gigantic potential upside if it works.” 

So for example, I’ve coached for Paul Tudor Jones for 24 years. He had not lost money in 24 years at what he does. Pretty amazing. How does he do it? 

A part of it is when I met him, he had some challenges and he’d left one of the principles. I dug it out that he lived by. It was five-to-one. If I’m going to risk $1. I want to try and make five. I know I can be wrong a lot of the time, but if I’m wrong, I can’t risk another dollar. 

I’m still making a ton of money on five. He can be wrong four times out of five and still be okay, versus the average person who is trying to get that 10% or 12%. He knows he’s not going to get it every time, but he goes for it. 

I’ll give you a better example. Kyle bass, you guys probably know. Petty famous because in the worst economic time, the last eight years, and in the middle of 2008-2009, he took $30 million and converted it to $2 billion. 

How do you do it? Well, he bet against real estate. Everybody thought real estate is going to go up forever. He bet against it, but here’s the brilliant part. He structured his bets with asymmetrical risk-reward, which means he never risks more than six cents to make $1. 

You can be wrong 15 times and still make money. That’s how you take $30 million and make $2 billion in the worst economic time in history. 

One more example would be Richard Branson. I’m lucky enough to be friends with him and he’s such a genius. If you look at Richard, this guy everybody thinks is a huge risk taker and he is with his life. I mean, four or five months, he ago almost died in a bicycle accident. He’s gone on balloon accidents, boat accidents. He puts his life on the line, but he never does that in investing. 

His whole thing is what’s the downside? That’s where he starts. He doesn’t want to lose money. He’s obsessed with asymmetrical risk-reward. 

When he was starting Virgin, a big risky thing you’re gonna take on one of the biggest British airlines and you’re going to buy 10 Boeing jets. What he did was he negotiated for one full year of Boeing until he got them to agree that if he did not make it in business in the first three years, he could give all the planes back with no economic loss to himself. 

Look at this. No downside. Hundred percent upside. Well, that makes your business a lot more comfortable to run than most people do. 

Third thing they all agree on, is they really want to make sure they’re tax efficient, because they know it’s not the dollars you earned. It’s the dollars you keep. 

I train all the people that work with me, tell me what it really is after taxes, and after all fees, that’s all that really matters. The spendable dollars. You guys do compounding. You pick $1 and you double it for 20 times. $2, $4, $8 it becomes 1$,028,000. 

If you just pay 33% in tax each year, most people will well, what would that be if 33% tax? I end up with $1,000,040 with a number. What will I end up with? People go, “33% tax or 33% of million is 700,000. You’re going to still lose 700,000.”

No. It’s compounding. You compound the costs. Do you end up with $28,000 instead of $1,048,000 if you’re just paying 33% tax? So these guys don’t start with tax. Starting to invest based on tax is stupid. That’s not investing. That’s getting involved in a scam. 

But if you found a good investment, believe you’re not going to lose money and you’re diversified enough, you got the right asset allocation, and you’ve got some asymmetrical risk-reward. Now you want to keep as much as you can. They focus on all the ways to do that. 

Then finally, the fourth one is really one we all know, it’s diversification. They’re obsessed with it. They want to diversify, obviously, amongst assets. They don’t fall in that trap of “I love real estate, I love stocks.” They have to diversify, because they know they’re going to be wrong. 

They diversify across assets, nothing in just real estate. They also diversify within assets. I don’t have one piece of real estate that I put everything in obviously. They diversify across countries and they diversify across time, because you’re going to have some timing that’s going to be off. However, if you diversify in all those ways, even in the last decade, remember, when the S&P was basically flat for 10 years…

If you diversified indexes across multiple countries and if your dollar cost average, your investments as an example, just those two diversification, across time and across location, you made an average of 7% compounded through time, even in the last decade. There’s always a way to win, if you understand these dynamics.

All these people are different, but these four things are in common. Don’t lose money, asset allocation, make sure you look at as much asymmetric risk- reward as possible, be tax efficient, keep more dollars, and diversify your tail off. Those four things are things they all have in common.

Stig Brodersen  34:22  

Perhaps Tony, if we can add a fifth point to this list, we could talk about biases. It seems like all of us, even the best investors, since they’re human, they’re prone to biases, whether it’s confirmation bias, overconfidence, recency bias. Just to mention a few. You are also a very successful investor in your own right. 

I’m curious to hear based on your own experiences, and of course, also the interactions you have with these high powered super investors. How do you and how do they combat biases and which type of impact has it had on that portfolio when they have not been successful?

Tony Robbins  35:03  

I’m pretty obsessed with not letting these biases affect me. I’ve gotten much better at that in the last seven years since I started on this with this group of people. When you’re around a guy like Ray Dalio, he made money in 2008 when everybody’s losing everything, right? What a 23% compounded return over 21 years. 

When I went to interview him, we were interrupted, because he had taken a call from the Chinese Prime Minister, right? He’s managing money for China. This is a pretty wild thing. 

When he says to me, “Tony, what kills everybody in the business is the confirmation bias. Everybody looks for other ideas to confirm it. Tony, it’ll kill you. I am obsessed with finding people who are very smart, not anybody, because anybody will disagree with you on the web. Everybody thinks they’re a genius. But somebody super qualified as much as I am, but diametrically, I should say opposed to what I’m doing. He must also want to argue with me.”

He seeks those people out every day of his life if you know anything about his culture and his company, it’s not for the weak at heart. Everybody’s job is to destroy somebody else’s idea and prove them otherwise because only the best survive. That mindset has helped me immensely because in the beginning, my worst investment was when I was like 23 or 22. 

I was 23 and I lived in Marina Del Rey. I was just starting to grow a little bit, make a little bit of money. There’s a place in Marina Del Rey in LA. It’s kind of a high end beach community where a lot of wealthy people are there. There’s a little place around the corner called the Barons Cleaners and that was the place where every celebrity went.

If I went there just to be inspired, leave my cleaning, but see the people coming in and out. One day this woman drives up in a brand new Rolls Royce convertible and she’s gorgeous. Getting all these clothes and so I walked up to her and I said, “I’m sorry to interrupt you, but I said I can’t help but notice you’re obviously quite successful. What do you do or what does your husband do?”

She said, “My husband and I…” So I was heartbroken. She said, “We own a penny stock company.”

I said, “You got any tips?” The dumbest thing you could possibly do. She’s making money because they’re taking fees like crazy for other investments. So she gave me a tip, and I put all the money I added, which was like, I don’t know, $4,000 or $3,800. I lost it all. I went to zero, right?

I think my good fortune is that I’ve had painful experiences early on that were small enough that it made me sensitized and then I got trained by the best people. So, what could be the mistake I’ll make today? I’ve got some brilliant artists that I work with and I’m partners with. I bounce everything off them but I also have the privilege if I’m looking thinking about an oil investment, I get to call T.Boone. 

If I’m looking at where the market is going, I can go from anybody from Paul Tudor Jones to Ray Dalio, and Carl Icahn. These are the people that I’m able to call friends now. So it’s hard to mess up. 

In fact, I have to say most of it was from the implementation of the same systemic thinking that made these guys great investors on the business side. I’m a product of the people that I work with. I’m far from perfect, but so far, things are going really well because I’m surrounded by the best people and I don’t make decisions on my own or think I’m the smartest guy in the room, because I’m not.

Preston Pysh  38:19  

The way you started there and you were talking about confirmation bias and how Ray had kind of suggested that was one of the ones at the top of the list. For me, I felt like I learned a lot about all these biases by studying Robert Cialdini. I’m assuming you’re a fan of Robert Cialdini.

Tony Robbins  38:36  

I’ve been a big fan of Cialdini for 30 years. 

Preston Pysh  38:38  

Is there anyone else that you’ve read through the years that you would put at par or that could also complement some of that information that Robert Cialdini puts out?

Tony Robbins  38:48  

Oh, there are so many books like the nudge type books and so forth. It also gives you additional tools, but I don’t think there’s anybody in his class. I have read him 35 years ago, for the first time when he first was at Arizona inking and teaching these principles. I think it was even before “Influence” was out and then he came out with “Influence.” I don’t think there’s anybody better.

I highly recommend that book to anyone to understand those unconscious tools. But I also think more of his focus is understanding the unconscious tools that trigger you to feel like you’re forced to do something. Social proof reciprocation, all those things. 

I think it’s really important for you to study the best investors and you guys interview them so you guys are a great source of it. 

In “Money: Master the Game,” I did 10 of those interviews with some of the best in the world because when you start seeing our patterns, not only what not to do, that’s part of it, but also what to do. I think you need both. You need the guardrail so you don’t go off the cliff. You also need to know where to steer.  

iI earned to become a racer when I was in my 20s and went to racing school. I’ll never forget. I went to Laguna Seca. Not far from you guys are. This driver is one of the best in the world and became a good friend, because I’m going to show you what a car can do. *inaudible* me in this car. 

If you go to Laguna Seca, there’s this area where you it’s corkscrew. You go to a wall around it. We’re going 165 miles an hour, straight to the wall. He showed me what a car can do and said, “In four days, you’re going to do that too.”

I said, “This is insane.”

He said, “Tony, we’re not going to have you do that corkscrew on your own. I’m going to be beside you and put you in a spin car.” 

It was a great metaphor. He said, “If you’re going to be a great driver. I don’t care if you’re the best driver on Earth, there’s going to be a situation out of your control. It’s going to be somebody whose car breaks up in front of you or their tire is going to go toward your windshield. There’s going to be oil on the track and you can’t see it in a wet environment.: 

He’s going to say, “The most important skill in racing is coming out of a spin.” As he’s speaking, I’m thinking that’s the best metaphor for life because everyone does well, when it’s going well. What do you do when you’re in a spin, when things aren’t working when you can crash? Then he goes, “All you got to remember is we’re going to be in a car, you’re going to drive 120 miles an hour, and you’re going to find out how much concentration that really takes.” 

“People think drivers aren’t athletes. They are. You’re sweating with just concentration and your muscles are flexing. Everything’s going because the minute you lose certainty or lose focus, everybody does. I got four buttons on the right here, I want to touch those buttons and lift up one of these four wheels and we’re going to spin out of control in that direction.”

He added, “Here’s what you got to do. Everything will want to want to look at the wall because a) we hit the wall. Minimum, there’s going to be damages to pay for and really bad, we die. I’m not in control. You are. You’re going to have to really focus. But here’s the key: Come out of a spin. Focus on where you want to go. Don’t focus on what you’re afraid of.” 

I thought to myself, no problem. 125 miles an hour at a wall and all of a sudden, I lose a little bit of concentration, push that button we’re spinning on the wall and what do I do? I immediately look at the wall because wherever you look is where you steer. 

Now he’s going to say we both will be alive. So, he grabs my head and shoves it to the left where we need to turn. I’m fighting him because I want to see but because he keeps shoving my head, I steer to the left, where my head goes is where you steer. Now, you’re doing the right thing, but you don’t get immediately rewarded. That’s the problem. 

Like you ate like a pig for 30 years and you dieted for five days. I’m going to lose more weight, right? So, you’re still heading to the wall. Your gut wants to look at it, but he held my head. Sure enough, the final seconds, I’m thinking it’s two inches from the wall. It’s like 10 feet. My heart was beating out and [he] goes, “Did you get it?” 

It took a dozen times for me to learn to just train myself to look away. Now, here’s why I told you the story. Here’s my question: If you focus on what you want, are you guaranteed to get it?

Stig Brodersen  42:37  

No.

Tony Robbins  42:38  

No, but if you focus on the wall, you’re guaranteed to hit the wall.

Preston Pysh  42:41  

Pretty high probability.

Tony Robbins  42:44  

What we have to train ourselves to do is focus on what it is we really want as investors and as human beings and not focus on what we’re afraid of, not because we’re guaranteed success, but because we’re guaranteed failure, if you focus on what you don’t want.

Preston Pysh  42:56  

Yeah, Tony, what a story man. It gives you such a visual on how you can apply that to so many different things that are going on in your life. I really appreciated that story. Thank you for your time, Sir. 

Tony Robbins  43:12  

I really enjoyed our time together.

Preston Pysh  43:13  

Thank you for your time. I know your time is extremely valuable. We just want to give you an opportunity to give a hand off to anything that you want to talk about that’s your passion.

Tony Robbins  43:26  

Well, my biggest passion is feeding people. I think if people who are listening, and we’ve already mentioned it, could pick up this book for yourself, I think you’ll find great value for you. I know you will, but it also will feed 50 families.

Once again, if you care about this personally and you want to donate $10 or $100 a million dollars, up to $4 million, I’ll match it if you go to feedingamerica.org/TonyRobbins, and we can help feed some people together. 

I’m also doing an XPrize, because I want to feed a billion people sustainably around the world. We’re bringing some of the smartest minds together and put together a $15-$20 million prize, we’re still refining it in that area.

If you care about other subjects, there’s a great group of people that I work with on slavery. With human trafficking, more people are enslaved today than any time in human history. It’s a smaller percentage of the population but more people and it makes me insane if it was your daughter, what would you do?

I work with a group called Underground Railroad which is former FBI, SEAL, and CIA members that go into different countries and train the police how to capture these guys. I’ve actually gone on these undercover with them. 

It is mind boggling what can be done so whether you’re you care about slavery, food or anything, find something you really care about and make that donation because I can tell you, I don’t know anybody. 

I told Sir John Templeton about this many times. He said this to me because I’ve never met anybody that’s *inaudible*. I don’t even know to be religious. It has taken 10% of their income and given it away over a decade who hasn’t become incredibly abundant financially. I think that most people when we hear about donations or philanthropists, we say, “Well easy for them.” 

If you don’t want to give a dime out of $1, you’re not going to give 100 million out of a billion. I had an experience one day where I was young and I was building my businesses and once again, overestimating what I could do in the year and I got frustrated. 

It was around midnight, I was driving this place called the 57 freeway in Pomona, California, in Southern California, not a nice place at the time. I’m so frustrated. I was asking myself as I was driving at midnight, “Why am I not succeeding? Why is this not happening?”

Then I pulled over literally on the side of the freeway, and I kept physical hard journals. I still have this journal. I wrote one sentence on a full page. I wrote the secret to living is giving and I burst into tears. 

I just realized, “Hey, when I started this business, it was all about serving and helping people. Now, I’m frustrated that I’m not succeeding. It’s all about me. I just realized that’s why I was so unhappy. It takes time to build something.”

That started to turn the corner but about three months later I was still in a tough financial place. I wasn’t a bad psychological place, but I just wasn’t resourceful enough yet. I had $19-21 bucks. It wasn’t $21. It was all change and small bills. and I couldn’t pay my rent. I’m living in this 400 square foot bachelor apartment in Venice, washing my dishes in the bathtub and eating on this hot plate on top of a trash can. It was terrible. 

So, I went to this place called El Cerrito because it was a taco bar. You can have tacos and burritos. I thought I’m just going to load up my car… I walked three miles. It’s not a big walk, but I didn’t want to pay for the parking because I only got 21 bucks or 19 bucks whatever it was. I load up. I eat like crazy and I’m looking out. 

I went there also because there’s these yachts that go by, and it was more opposite than my lifestyle. It just reminded me that there are people doing well, even though you’re not, so you’re missing it.

I finish the meal and right as I’m finishing this gorgeous woman walks in, and I couldn’t help but know she’s just really beautiful. But then, I’m waiting to see… The guy who opened the door behind her, that’s holding the door is a person half her size. It is this little boy, he’s probably eight, nine years old, third or fourth grade, if I remember right. 

He’s wearing a suit and tie while he held the door for his mom. He pulled out the chair for her and sat down and gave her total presence. Like you can just see he was not distracted. He was there for his mom. Something about it just moved me. 

I was on the verge of tears. I don’t even know why it just triggered something in the end. So, I went to pay for my meal. It was $5.95. I had $17 left, whatever it really was at the time. I walked up this little boy, and I didn’t look at his mom. I just shook his hand, and I introduced myself. I think his name was Charlie. 

I said, “You’re a class act. I saw how you held the door open for your lady here and how you held the chair for her and how you’re so present with her. That’s amazing. You’re taking her to lunch, except that it’s even more impressive.” 

He said, “I’m not taking her to lunch. I don’t have a job yet.”

I said, “Yes. You are taking her to lunch. I had no plan to do this.” I just reached in my pocket spontaneously, took all the money I had on Earth and put it on the table in front of him, and he looked up. His eyes got really big and he said, “I can’t accept that.” I said, “Yes, you can.” He asked, “How come?” I said, “I’m bigger than you are.”

He giggled, and I didn’t even look at his mom. I didn’t do it for that. I walked out of that room, restaurant, no car, and I kind of skipped home. I probably looked like a total idiot. I was high as a kite. I should have been like, “What did you just do? You don’t have any money for your next meal.” 

That’s the way my mind has always been, like scarcity. I went over, and I had no fear. I can’t even explain it to you. I woke up the next morning. I knew I had no money. No meal. It was like well fasting for a few days, and I wasn’t stressed at all.

Then, this unbelievable gift comes to me in the mail. I get the mail. Then around noon, I hadn’t eaten a thing, not worried about it. I open up all these bills. A little depressing, but then I get this personal note. I undo it and read it. It’s this man I loaned $1,000 to three years before he was desperate. I didn’t have a lot of money, when I loaned it to him. I chased him for six months because I needed the money so badly.

He wrote me this long letter apologizing, saying, “You were there for me when I needed it and I wasn’t there for you, but I am now.” He gave me like $200 of interest. So $1200 bucks. In those days that lasted me three, four weeks, right? 

So was sitting there reading this letter crying my eyes out and just feeling such grace. Why did this happen? I don’t know why it happened. But here’s what I decided. It happened because grace came to me because I did what was right. I didn’t do it for a woman’s attention. I didn’t do it for any reason, except it was the right thing to do. I knew at that moment, it was the right thing to do. It was a decision made with no fear. 

A lot of companies now in the early days, some of these companies were on the verge of bankruptcy. During some tough times, I didn’t bankrupt any of them, but it was so on the edge. Even in those days, I never went back to the scarcity. I had challenges. I never had the fear. I planted my seeds, when I had nothing, and they gave me abundance. 

So your listeners, they have something. Teach your brain that there’s more than enough and put a systemic way of giving back to something you care about. Give it five bucks or 10 bucks, because I talked about this in the book, nothing gives you more joy, nothing changes your biochemistry because we can measure what happens to you hormonally in your mouth, literally minute by minute these days, than giving.

If you buy something for yourself, nothing wrong with that. But things don’t hold very happily for very long. If you buy experiences, learning experiences, travel with your family, those have a longer resonance of joy.

However, all the research shows, it’s not just my philosophy, that we are made to give because when we give, even if you bought coffee for four people in line whom you don’t know, the joy in that person’s body will be there for a minimum of 24 hours, usually multiple days. You buy something, there’s a hit. Maybe when you get a hit, there’s another hit. 

After some short period of time, it doesn’t give you the same hit. Plus, it’s just not meaningful. So my hope is that the people listening will say, “I want to do well, and I want to do good. I don’t have to wait till I do well to do good, I can do good now and that’ll help me do well, because it’ll shift my own psychology. It’ll make things richer and more.” 

So, I hope people are inspired by this conversation. I know most your audience probably already is huge givers. But why not do a bit more, do a bit more just to remind yourself what you’re capable of. I know you cannot give like this and not receive on a massive scale. 

You cannot not prosper if your life is about adding value to other people’s lives. I hope that people here will take advantage of least of the book for themselves and maybe be inspired by that. They can change their own life. If they don’t do anything else, I’m still going to feed 50 families for their effort in reading the book.

Stig Brodersen  51:54  

Thank you, Tony. This was just amazing. Thank you so much for your time today.

Tony Robbins  52:00  

Thank you. I really enjoyed [our talk], and listen, [if] you want to come to an event sometimes, my guests love to have you. I’m doing one in New York in November. If you guys want to come as my guest, 14,000 people will be there, and it’ll knock your socks. Look on my website any time you want to come reach out to me, and I’ll have you guys. Love to meet you in person.

Preston Pysh  52:16  

If there’s anything we can do to help you, Tony, seriously if there’s anything we can do with the marketing of the movie that you’re working on. Anything. Please let us know. We want to help you in any way we can.

Tony Robbins  52:28  

You guys are really kind. We will become good friends. I’ll look forward to meeting you personally sometime soon.

Stig Brodersen  52:32  

All right, guys. That was all that Preston and I had for this week’s episode of The Investor’s Podcast. We will see each other again next week.

Outro  52:38  

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