Unshakable is Tony Robbins’ guide to help you retire rich with smart investment and compound interest.
- Start investing early
- Stay in the market
- Control your mind: don’t panic, don’t overtrade
Tony Robbins starts first by explaining what “unshakable” actually means:
Unshakable is a state of mind. That you are safe and will be alright no matter what. This book should help you to feel financially safer.
The Money Masters
The men Robbins interviewed for the book are a who’s who of finance:
- Ray Dalio, possibly the most successful investor ever -read his Principles–
- Mary Erdoes, managing nothing less than 2.4 trillion assets at JPMorgan
- Jack Bogle, the pioneer of index funds and founder of The Vanguard Group;
- T. Boone Pickens, billionaire takeover operator of the ’80s
- Carl Icahn,
- John Paulson, who made 4.9 billion in one fell swoop during the financial crisis (read The Big Short)
- Warren Buffett, who doesn’t need any intro
Tony Robbins is a big proponent of compound interest. He says that you will not earn your way to riches: just look at celebs and how they go bankrupt all the time.
It’s saving and using compound interest, says Robbins, that will transform small amounts of monthly installments into fortunes.
My note: albeit resources like The Millionaire Next Door and The Millionaire Mind pitch the same idea, I fully disagree (read the cons).
Stock Market is Safe
Tony Robbins uses a bunch of statistics to basically say that the stock market is safe. “It always rebounds”. Nobody will know whether it will rise or fall but, in the long term, it will rise.
Stay in The Market
Robbins says that the biggest danger you face is actually staying out of the market. The longer you stay out, the more your sabotage your compound interest.
Compound interest requires you to be always in the market.
Taxes & Fees
The author reviews a bit of the big impact that government taxes and hedge fund fees can have on your returns. In a nutshell, you should:
- avoid actively managed funds
- take steps to minimize your taxes
- Avoid transaction costs by trading less
- avoid brokers (they work for a company, not just for you)
He has a list of questions to ask your financial advisor, for which I recommend you get the book.
Or check Money Master the Game.
Seeking confirmation of your investment decisions and beliefs instead of looking for opinions to contradict them
Believing a current short-term trend will continue.
My note: one could say the same about the stock market “always going up”.
We overestimate our abilities.
Greed and Gambling
We have a tendency to look for the home run, the big payday, and the lottery win. But it’s slow and steady that wins the game.
The tendency is to invest in companies and markets geographically near. Diversify internationally instead.
Loss Aversion and Negativity
During financial turmoil and a bear market, your brain will want to panic. Don’t. And do what’s logical, not what your pain-avoiding brain tells you.
Also, read Thinking Fast and Slow and my thesis on the psychological pitfalls leading to the financial crisis.
Mastering Your Mind
Tony Robbins says financial freedom is only one part of success and fulfillment. And he spends a good chunk of his book on “the other important parts of life”.
As usual this in high Tony Robbins standards. I invite you to get the book and check Awaken the Giant Within or Personal Power II
The compound interest theory
Rarely do I hear compound interest theorists talk about inflation. Or what giving up those monthly installments will do to the quality of life of average or below-average-income people.
You’ll never earn your money through earnings?
Never…? I love Robbins but that sounds precious to say and it’s what DeMarco calls the “paradox of practice”. Tony Robbins didn’t get a private jet and an island investing a few hundred a month. He got there using the Millionaire Fastlane. I also invite you to check Rich Dad Poor Dad.
Nobody knows… But it will go up
I experience a strong pushback anyone somebody says the stock market will always go up. Especially when they talk about psychological pitfalls but then they’re all so sure the market will always go up. Hell, it went up for the last 100 years… Which still doesn’t say anything of course.
If you’re one of those guys I warmly invite you to read Fooled by Randomness.
I listed a lot of cons because, as usual, I feel I need to make all counter-argument I can think of.
But overall Unshakable is a great resource for investing.