Tony Robbins on Morning Routines, Peak Performance, and Mastering Money (#37 & #38)

I am asking this from the most respectful place possible. Because I’d be super excited if someone could answer this for me.

As a skeptic, what would be the best way for me to learn that the stuff Tony Robbins does (ie. removing someone’s stuttering in 10 mins) is not complete BS?

I mean, Americans are raised to believe being rich, successful and fabulous are the keys to happiness. ”It’s your birthright” Tyler Durden was one of the few to burst that bubble. And look what happened to him. Meanwhile the class war still rages. We don’t need mega wealth. We need different values. And role models teaching our children simplicity, sacrifice, creativity, community – not ”spawn your empire and be a GOD” – are what count. We need more like Ghandi. I’m not saying Robbins is spiritually bankrupt but many of his famous clients most definitely are

When I was reading post on heat being a possible new performance enhancing drug I thought to myself why does Tim (Ferriss) not mention cryotherapy? I figured out he just does not state the obvious 🙂

Being Polish I can tell you this. In Poland cryotherapy is often prescribed by doctors (especially sport ones and geriatrics) and I know one a very good sports clinic which has its own cryotherapy facility. In fact, one of the first things they do is they make you go there ( of course not in every case) and then exercise.

If you do not have access to cryotherapy however, consider another thing that Poles leaving at the seaside do, which is getting into the sea during the winter time. Check it out, you won’t regret it!

IMPORTANT: do not this in rivers, you will die; warm up really well;

have a protective footwear (e.g. aqua shoes) ;

DO NOT get your head underneath the weather or let it get very wet, in fact you should wear a beanie;

as soon you feel that your feet or legs are going numb, leave the water immediately, if you wait too long you won’t be able to get out of the water alone;

DO NOT do this alone, always have someone at the shore who can help you.

Tim, thanks for writing the times next to the podcast highlights. Super, super helpful!

As for Question of the Day, I don’t usually read investment advice, so the best advice I ever got was “spend less than you earn.” Effective, though.

I really enjoyed this podcast, thanks so much Tim! I loved it so much I wrote a blog about it. Just wanted to share here with the fans of the podcast. Its called: How Tony Robbins “Owns The Morning!” I’d appreciate any kind of feedback, constructive or suggestive. Thanks, Chris

http://www.180fitnesschris.com/tony-robbins/

Tim, in your podcast (great, GREAT interview by the way across the board), Tony mentioned if we turn in our Amazon receipt he will send 3 intro videos. Can’t find link or any info on this as stated. Is there an email to send to? thanks. Big fan,

Corey

The best financial advice I’ve ever read was James Altucher’s Ultimate Cheat Sheet for Investing All Your Money:

http://www.jamesaltucher.com/2014/04/the-ultimate-cheat-sheet-for-investing-all-of-your-money/

He really cuts through the bullshit.

Fish and Salad! Any specific type of fish Tony eats?

Do not recommend Stronghold Financial. If you look carefully, you’ll see that if you decided to join Stronghold and use them as your broker, you’ll be charged a 0.75% fee quarterly based on your assets (not clear if that means a 3% fee/yr or if that’s the annual fee) PLUS they may charge “custodial fees, brokerage commissions, transaction fees, charges imposed directly by a mutual, index or exchange traded fund, transfer taxes, and wire transfer and electronic fund fees.”

Save your money. Go it on your own. VTI or straight to SPY.

Love,

Kuno

On the interview, which was great, you mentioned show notes which would have some info on Tony’s breathing practice. How can I get access to the show notes. Thanks.

I’ve being waiting for a book like this for a long time I hope it’ll change my life!!

I used to teach and best thing to hear was the kids saying how the class affected them. So because of your podcast, I did my first Spartan Run and am half way through my cryo-chamber therapy (currently at -120 2min), so jealous you got that time with Tony, thank-you for the great material and books, all the best.

The odds are, you don’t know what the odds are.

Some people believe man never walked on the moon and some believe man walked on the water. There will always be people who will believe all kinds of nonsense regardless of the proof.

If you are an investor or want to invest in the market then you should read this. – Especially the 2nd part of this review titled “Risk and Return”

Obviously Tony is an excellent motivator and has helped a lot of people to get better in every aspect of their life. I am a fan of Tony and his mentor Jim Rohn’s teachings on developing a value system. But I disagree with some of Tony’s mixed messages regarding investments in this book. Don’t get me wrong, there are a lot of good thing in this book that one can learn from. But he mixed good advise with bad advise. Result, readers will get confuse again.

1) In this book Tony has repeatedly said that you are now an insider. That is a false claim. All the investment information he is talking about already available publicly online and in books. Listening to this, some time I thought, is Tony addressing the uneducated, ignorant people only or what? We all know what insider and public information is.

2) On one hand, Tony correctly agrees with the French-Fama research work that *no one* can predict the market but then he turns around and tries to predict the market several times in the past. He was proven wrong. Please Google for Tony’s market prediction.

3) Again, on one hand Tony correctly advised to invest in optimally covariance asset class, in globally diversified index fund, for the historical (30+ years) highest return for the historical (30+ years) lowest standard deviation, for the long haul then he turns around and talked about annuity, TIPS, structured notes etc. without warning against investing on these. A mixed message at the best..

4) Most of his advice on how to save money is age-old advice. The book is full of very basic math on saving. No brainier there. Uneducated and less sophisticated people are not the one who will pick up Tony’s book or any book for that matter or any matter. Ha…ha….They don’t read books. Period.

5) Tony recommended http://www.LifetimeIncome.com

Take a look at this website. It is obvious, this website is created in a hurry just to meet volume of calls due to Tony’s books. I also talked to them. They do not have return vs. risk historical data over 30+ years period. Did Tony not know that before recommending it? BTW< their phone lines are always busy.

6) The best investment currently available for 7.0% risk level (standard deviation) is about 8.8% over the past 50 years of historical data. How can one know if he is getting a better deal if he/she can't compare the alternative investment that Tony is recommending? Shame on Tony for implying to invest in unknown risk /return data. That's gambling. Why Shame on Tony? Because I expected better than that from Tony.

7) You can find the best available return for each percentage of risk online. Then pick the percentage of standard deviation (risk) to match your personal situation and mental/emotional state.

8) Even the motivation parts of the book is not new but it helps to hear it repeatedly. Again, I liked the general motivational part of the book very much.

9) Tony is a fan of Ray Dalio. Of course, Ray is a smart guy, very rich guy and resourceful person. Ray Dalio calls his strategy an "All Season Strategy". This name correctly implies that some asset classes do well in one season and poorly in another season. Whereas, other asset classes do just the opposite. By mixing these asset classes one could lower their risk. However, Ray tries to give the impression that he knows something, has skill, knowledge, and has a crystal ball that you and I don't have, that can be used to get a better return. Therefore pay him and make him rich.

10) French-Fama has already proven that no one is smart enough to consistently beat the market. No genius is required to get the best return for the same risk by investing in index funds with optimal risk-return value. Process is mechanical.

11) Tony recommended Stronghold and Gupta Wealth Management (WM). Both are owned by the same person. I called Gupta Wealth Management. I gave them run for their money. First, I talked to Phil and then the owner of the Gupta WM. Their fee is lower than others but by no means is the lowest in the industry. Gupta WM charges 0.75% to 1.00%. I pay half of that for the same exact investment that Tony advised and Gupta offers. Why did Tony not research for the lowest cost of investment available before recommending Gupta?

12) Was Tony doing a favor to his friend Gupta?

13) I know that all the money from this book money will go to charity. But as Tony said, and I agree, that after certain income level, money is not the end. Power is. Tony doesn't need money anymore. He needs power. Doing a favor to a friend like Ajay Gupta, and others is one way to accumulate power. The question one has to ask, "Is if the favor Tony did to Ajay Gupta is fair and just?". Gupta is not the cheapest index investment in the market.

14) Then Tony talks about asymmetrical risk. We all understand, that every now and then you might find a very good deal buying a car or house when the seller needs cash in an emergency to pay for his mom's surgery. Or you might get a similar but other form of asymmetrical advantage. For example, a company is in financial distress and you can jump in to take the advantage of it, buy it cheap. Big companies buy out a small company all the time who needs the money urgently. That is not for an average investor. Was Tony talking about this kind of anomaly? Of course, not. The context of his writing implies that there exists a persistent systematic asymmetrical advantage. But that is not true. When a new thing with a very high return with low risk (asymmetrical risk or value) comes out, very quickly, everyone jumps in. In a matter of minutes that asymmetrical value will be smoothed out. The market will come back to the norm.

15) What is the market norm? The optimal return/risk value provided by value index fund over long historical data. Period.

16) Of course, every now and then some gambler beats the norm. But smart people do not plan their life, their long term consistent strategy on luck, anomalies, angels or man walking on the water.

17) Tony's book gives mixed messages as it is given in holy books such as the Qu'ran, Bible etc. In one chapter, the Qu'ran talks about being kind and forgiving. Then in the very next page it says to go kill the infidels. You can find similar contradictions in the Bible too. In one chapter Tony correctly advocated to invest in index funds then in next chapters he turns around and advises to buy into several different kinds of investment without knowing its risk / return graph of the past 30 to 50 years.

Personal Story

============

I am an average of the group who would read Tony's book or my this long review. I am a software architect, physicist, and self-proclaimed philosopher. During 1998 to 2000, sitting in my home office, using 3 computers, I was trading with E-Trade, Charles Schwab, Fidelity, almost on daily basis. I saw all the dot com stocks going up. Along with millions of people in the US and around the world I thought, I am genius. I am invincible. I was making hundreds of thousands of dollars a week of my personal money – but only on the computer screen.

Those graphs on my monitor, those phosphorus dots on the screen, had the power to change my mood, my happiness, my sadness. It totally absorbed me, my emotion, and my world. Then the bust came. Dot com burst.

I lost most of my wife's and my net worth in the dot com burst. I used to get up in the middle of night, sob and cry I did not know what to do. This went on for months.

After losing my shirt and pants in the year 2000 dot com bust I learned to invest correctly. It took me the following 6 months to learn these stuff. Since then I invest only in "Globally Diversified, Optimally Co-Varianced, Multiple Value-Index-Funds" for the last 14 years. I pay tiny amount to the trader/manager. It has served me well. I also sleep well at night. Instead of tying myself to daily, weekly, quarterly or even yearly market fluctuation. I now enjoy my work, the real life with friends and family, travel around the world while my money work for me 24 hours/day, 365 days/year with predefined standard deviation and return. I was laughing at 2008 market crash while still invested in the market.

Most of my friends left the market for good. They never trust the market again. They invested in real estate or somewhere else. I thought, after losing so much money if I do not learn the stock market then all these loss is in vain. I must learn and conquer it. So I started my journey.

14 years ago, over 6 months, several hours/week, debate/discussion with a very smart money manager, a nuclear physicist by education, I eventually learned. In connection to stock market investment we discussed everything under the sun, from quantum mechanics uncertainty principle to determinism, From free will to passion versus rationality, from luck to intelligence, from behavioral economics to evolution theory. We discussed these over the long distance phone calls. This went on over 6 months. After reading stack of books over two feet high, digesting the content and pondering over it weeks after week, I asked my money manager, as a compliment, the following question.

When are you going to send me a certificate of graduation from your Institute so that I can tear my Harvard Business School degree in finance and flush it in the toilet?

[No, I don't have a degree from Harvard.]

People ask, can you still lose money in the market?

My Answer: Yes, I can. But before you see a single drop of tear in my eyes again due to my stock market losses you will hear in the CNN and Fox news thousands of people are committing suicide left and right and there is a big riot on the street.

Here is the summary for the investment chapters of entire books. If you are college graduate and have average IQ you will understand this.

Risk and Return

=============

Well proven facts you can Google and find the sources on your own.

1) Some people believe Man never walked on the moon and some believe man walked on the water. There will always be people who will believe all kinds of nonsense regardless of the proof.

2) No one, no one, in the world could ever predict the market consistently

You can say the same thing in another way: No one, no one, in the world can time the market

3) Each investment (stock, fund, bond, real estate) has objectively measurable, quantifiable, numerical Risk and return values. These information are publicly available. We have the data since the Dutch Tulip mania to date.

4) The longer the duration over which you measure average return and average risk (standard deviation) std, the more is its reliability This risk of an investment is nothing but the measure of the fluctuation of return over time. There is a very specific statistical formula for it. You can Google for the formula of standard deviation.

b. But for layman, you can view risk as follows:

c. In the stock market or fund investment one could stay rich for x number of days and then stay poor for the next y number days, then again stay rich for the next z number of days, and poor again, etc. The measure of how often and how long you stayed rich and poor at what level is the standard deviation. This is what risk is. Risk is also called Beta. Ideally you want to stay rich all the time – std. = 0. Risk adjusted return is called Greek letter a, alpha.

5) A portfolio that has higher return will have higher risk. But just because a portfolio has higher risk doesn't necessarily mean has higher return. Because, there exist unrewarded risk in the real world.

6) Therefore, to get a higher return you must take higher risk but not the unrewarded risk. But remember, never take higher than the risk you can handle. More about personal risk capacity later.

7) You do not invest on the basis of IBM is going to come out with new technology or hired a top notch CEO etc. therefore, let's buy IBM stocks. But you invest looking at the historical risk vs. return of IBM stock. Again, history is the only thing that counts in investment. You may hope a better future. But your hope must be based on the past history of the stock, fund, or portfolio – regardless of what you invest in.

8) If you do not have the data then do not invest. Otherwise, you are gambling. Tony is not consistent in his explanation and teaching. At the best he gave a mixed message. He omitted the danger of lack of data of his proposed alternative investments.

9) You must invest for the very long haul, 20 to 50 years.

10) How to enter or exit the market?

Do dollar cost averaging. This means don't put all of your money in the market at once. Do not take all of your money out of the market at once. Instead put smaller amounts every month or quarter.

11) Although, you must take the highest possible risk that you can afford to get the biggest return. In other words, never take more risk than your "risk budget". This is also called your "risk capacity"

12) Unlike the risk (std.) of a portfolio, your risk level is neither objective nor quantifiable. Your risk level depends upon how old you are, your educational level, number of children you have, your health, etc.

13) Secondly, but very important part of your risk level is purely psychological. How do you cope with ups and downs of the market? This is almost impossible to quantify. Alas, we have to use this unquantifiable risk against the quantifiable risk (standard deviation or Beta) of the investment.

14) When you invest, you invest using two things, 1) money 2) your risk balance. If you run out of any of these two then you can no longer invest.

15) The most difficult part is to know when you run out of your very subjective-non-quantifiable, risk budget while consuming quantifiable risk of a particular investment. Subjective vs. Objective. There is no way out of this dilemma. That's is where money managers take advantage of you.

16) There exist dozens of value index funds. Vanguard and DFA are the most popular companies who package the index funds. I use DFA funds. Investing different percentages of your total cash into various index funds is called asset allocation. This will produce a net "risk versus return" graph for your overall portfolio. Different asset allocations generally give you different risk vs. return graphs.

17) Different money managers can produce the same risk and return with different combinations of asset allocations. A simple computer program can optimize the risk / return. No human brain is required. No experts, no experience, or money manager is needed. That is why it doesn't make sense to pay a high fee for this kind of investment. Interestingly, most importantly no other form of investment produces more return for the same risk.

18) Coming up with an asset allocation that produces a better return for any given risk requires no human intelligence. The process is mechanical. A computer will try out various combinations of asset allocation, mix and match and produce a better result than before. It is not a product of a money manager's genius. One doesn't have to be a financial guru to do this. Software does. Money manager cannot do this. It requires trial and error by the computer, an iterative method, a dumb process as dumb as genetic evolution.

19) If you need a financial guru to pick a winning stock (or a winning lottery number) then hire a money manager. A computer cannot pick a winning stock any more than a winning lottery number. But a computer can find a better return-risk asset allocation by iterative trial of various asset allocations.

20) So how do money managers still keep their jobs?

d. Answer: By miss-representation or outright deception. Overwhelming majority of the managers either do not know about Globally Diversified, Optimally Co-Varianced, Multiple Value-Index-Funds returns best risk-return or do not believe it does. Among those who knows and believe in it won't tell you because then they lose their high fees.

21) Money managers play with the subjective part of your risk budget. Since your risk budget is subjective you can't prove them wrong. As prophets fools their disciples by claiming supernatural powers.

22) Lesson: Ask them to show you their best asset allocation to produce highest return for the std. of 1%, 2%….x%. Compare the return of your Money Manager with other Money Manager for the same risk level. This will be independent of the investor. You should shop for the best return for each standard deviation. Then, you should pick the one that matches your risk level and gives you the highest return. You can't go wrong by this method.

23) Here is the list of all DFA funds

e. http://quicktake.morningstar.com/fundfamily/dimensional-fund-advisors/0C00004AKC/fund-list.aspx (link as of Nov 2014)

f. You can find the Vanguard index fund at http://www.vanguard.com

24) Again, the trick the money managers will play by saying, "We will find a best match for YOU."

g. Your response should be, don't worry about me. Just show me your best product for each risk level. Then compare that with portfolios offered based on value index funds by other money managers. Remember, no one, no one, will care about your money more than you can. Self-reliance is the key. Consult the expert but YOU must make the decision rationally.

25) I say, I do not care, what your asset allocation is, I do not care if the investment is about selling thin air or if the investment is in a business that sells houses in the heaven that one would get after they die, just show me a simple X-Y axis graph of return versus risk over the past 30 to 50 years. Then I can make my decision.

26) Have you noticed, overwhelming majority of the mutual funds do not have more than 20 years of data? Why? To cover up, to hide the incompetency of their investment, or asset allocation. They sell hope, more accurately, false hope.

27) Let me help you to understand.

One of my friend who has finance degree from one of the top notch university and practicing investment advises his friends to buy Google stocks because it is a good company. I say, Stupid, stupid, stupid. Ask yourself, Is it a public information that Google is a good company or only you know it?

If it is a public information then Google stock price already have adjusted to its proper value. You are not going to get any special value by this piece of information for any specific stock. That is why you need to invest in the massive number of stocks, indexing and preferably value indexing.

Did you know that old boring business like Walgreen produced more return for its investors than the famous, exciting company like Intel over its life time? Ha…ha….

[Moderator: Email address removed.]

Great Interview with Tony… I listened to the whole thing & considering it was 2 hours long, it flew by! One question: I am in the UK and the UK Amazon reviews generally say that this book is only helpful for the U.S. markets & tax system. Does anybody have any feedback from a UK perspective?

Based on this interview, I bought “Money Master The Game” today. I’m looking forward to starting it soon..

Hi Tim, just starting to check out your podcasts. (Know and love your books.) Six minutes into TR interview and it still hasn’t actually started yet… this is frustrating. I’d prefer very short intros and just get rolling with the content. Maybe 45-50 seconds max, including plugs would be much better. Very de-motivating for someone who’s busy and trying to maximize time. Thanks.