We Study Billionaires - The Investor’s Podcast Network - TIP 018 : Tony Robbins' Book - Money, Master the Game (Investing Podcast)

Starting point is 00:00:00 This is episode 18 of The Investors Podcast. Broadcasting from Bel Air, Maryland. This is the Investors Podcast. They'll read the books and summarize the lessons. They'll test the waters and tell you when it's cold. They'll give you actionable investing strategies. Your host, Preston Pish, and Sting Broderson. All right.

Starting point is 00:00:30 How's everybody doing today? This is Preston Pish, and I'm your host, for the investors podcast, and I'm accompanied by my co-host, Stig Broderson, out in Denmark. So today, we've got a very interesting book that we're going to be talking about. Stig and I have both read Tony Robbins' book Money Master the Game. The book talks about seven simple steps to financial freedom, and the book is a huge honkin book. It is 655 pages long. So this one took us a little bit of time to get through.

Starting point is 00:00:58 But we're going to be talking about some of the high points today. The episode might go a little long because there's a lot of things to really kind of cover in this book. So we're going to try to make sure that we hit all the high points for you. Stig, did you have anything that you wanted to add on the book itself, just right off the top of your head? No, general, I just think it's a great book. It might be a bit too long, as you said, but I think there was a good nugget, although it might be far between from time to time. Yeah, I have a similar opinion. And we'll get into that later on in the show.

Starting point is 00:01:27 So we have three segments for this show. So the first segment, we're going to be talking about who Tony Robbins is, just so everyone kind of has a little bit of background of him. And then the second segment, we're going to go through each of those seven simple steps that he outlined in the book, which were long. And then the last section, we're going to talk about our thoughts, our general thoughts on the book and the strengths, the weaknesses, and whatnot. So let's go ahead and just kick this off with our first discussion about Tony Robbins and who he was. So Tony started off as a, he had a very interesting background and upbringing. So his mother was a drug addict and she had put a lot of difficult times in his life. She ended up getting divorced.

Starting point is 00:02:10 I think whenever Tony was about seven or eight years old. And then she was remarried to this semi-pro or maybe like professional baseball player who I don't think really went all that far, maybe in the profession. But Tony lived with them and he talked. about having an abusive relationship with his mother. And by the age of 17, he said that he was chased out of the house by his mother with a knife and he never returned. So Tony had kind of a rough upbringing. He then went and became a janitor and was working as a janitor. And just kind of down in his life, just didn't really understand how he had got there, looked around at his surroundings and was just a very depressed person.

Starting point is 00:02:52 And then he found this person named Jim Rowan. And Jim Ronan was a motivational speaker. And he talks about this a little bit in the book, but this is more of a biography on Tony before we get into the book. And so Jim Rowan basically changed Tony's life. And Jim was this motivational speaker, kind of like a life coach. And Jim had some really big points that he instilled in Tony and that he really taught Tony the essence and the importance of investing in yourself. and to study great people and study the essence of great people in order to become great yourself and to add more value to the world.

Starting point is 00:03:33 So that was the contribution. That's the thing that Tony really took away from Jim. And so ever since he had met Jim and started, you know, understanding the principles that Jim taught in his course, Tony's life just kind of went into a rocket mode and just he just shot into the stratosphere with his accomplishments. So Tony started off after meeting Jim by studying and learning neurolinguistics and programming. And what he did is he promoted a series on peak performance coaching for TV infomercials back in the 1980s. And so some of the older generation may be listening to the show. They definitely remember Tony Robbins from back in the 1980s because his episodes were just broadcast all over the United States and elsewhere promoting these TV infomercials.

Starting point is 00:04:20 So Tony really gained this appreciation. in this understanding for reading and improving his knowledge. And so he, in 1987, he wrote this book that was just a widespread bestselling book called Unlimited Power. And for anybody that's never read that book or don't know anything about Tony Robbins, you probably actually want to start with that book before you'd read money, the book that we're actually doing the review for because the book is pretty outstanding. And what a lot of people say is that the book was based around the same principles of of how to win friends and influence people,

Starting point is 00:04:54 which everyone knows is a book that changed Warren Buffett's life. It's also this unlimited power book that Tony wrote was based on a lot of the fundamentals from Napoleon Hill's famous book, Think and Grow Rich, and also the famous book, The Power of Positive Thinking by Norman Peel. So all those people are high-powered authors. Tony read these books, became highly influenced by it, and then he basically meshed all those thoughts into his book, which is the unlimited power book.

Starting point is 00:05:21 So definitely a great read, something that if you're a person who's wanting to kind of take your life to the next level, probably somewhere very good for you to start. So all this enterprise that Tony had created, and then he goes and he has these circuits, he does these speaking circuits and all sorts of things. But in the end, where he's at today, Tony Robbins is worth $480 million. So this guy has become just an enormous success for what he's doing. and you don't become an enormous success without there being actual power in what he's doing and what he's teaching and preaching to different people. So we're very big fans of Tony Robbins. We look at him in a very positive light.

Starting point is 00:06:01 That was one of the reasons we just didn't even need to see reviews on the book. We just went out and bought the book as soon as it came out. And this book came out, what was it, November Stig? I want to say it was. Yeah, this seems about Brian. Okay. So the book came out and we were just like, yeah, we've got to read this and see what he has to say about money and finance. because, I mean, that's our thing.

Starting point is 00:06:19 So one last thing that I had that I wanted to highlight with Tony's biography was the idea of giving. And that's something that he talks about in the last portion of the book. But just as a real quick highlight here at the beginning when we're talking about his bio, Tony has initiated programs of more than 1,500 schools, 700 prisons, and 50,000 service organizations and shelters. And whenever he talks about this new thing that he's doing where he's, feeding the homeless. He's feeding. Do you remember the numbers? It's in the millions. Yeah, it was something like, was it 50 million people? 50 million meals. Yeah, I was so impressed by that. He's feeding 50 million meals to people just this year. So to kind of give you an idea what this guy's

Starting point is 00:07:04 all about, let me tell you, he's an impressive dude. So he wrote this book and it's called money. So that's what we're going to be going through here in the second segment. So here's our overview of the book. So the book is truly broken down in the seven. sections and so we'll go by each section. So the first section is titled Welcome to the Jungle. So this one is just kind of a primer and it talks a lot about how the large financial institutions are set up to make a profit for themselves and they don't necessarily really care about you as the client. So there's a little bit of truth to that and there's, you know, it's a conflict of interest is I think a better way of putting it for people. The first interest for the companies that they

Starting point is 00:07:45 make money and they continue to exist. Their second interest is that you also make money in that you're profitable and don't leave their service or they wouldn't have a business. So there's, there's this constant conflict of interest that's occurring. And that's something that Tony talks about at the start of the book. He also uses the start of the book as kind of a motivational section. And I think that's just comes from his inherent nature of what he does. And that's to motivate people and to help them change their thinking that it's them that's got to change and not the environment around them. And so you kind of get a taste of that at the beginning. And so one of the quotes in the first section here that I really liked is he says, you have to make this shift from

Starting point is 00:08:22 being a consumer in the economy to becoming an owner. And you do it by becoming an investor. And so that quote for me is absolutely a great point and something that I think a lot of people need to focus on because a lot of people are just consumers. When you go and I, you know, I have kids in the house. When you look at what they're doing, they're sitting. at the computer and they're just consuming content all day long. They are not creating anything for society. So when you look at other people, when you look at adults, how many people do you know to get on their computer at work and they're just taking up time and they're not actually producing something of value to the organization? So he kind of takes this same approach to investing.

Starting point is 00:09:04 If you're there just consuming and you're not actually taking your retained capital and investing that and buying a business, because that's what you're doing when you buy something. stock or bonds or whatever the financial investment is, when you're buying that asset, you are actually contributing and becoming an owner for assets and society, opposed to just consuming things and buying things. And that's where you really make the shift where you start creating more value for yourself. And I thought that was a really important piece of the first section.

Starting point is 00:09:35 Something else that I want to quickly highlight is that he has another quote in the first section that I really liked, and it was success leaves clues, people who succeeded at a high level are not lucky. They're doing something different than everybody else. And you have to tap into what those clues are and you have to study them. And that's what he does. He studies just amazing people. So that's why you can kind of see why he's led to so much success. So just two quick highlights there for the first section. So as we go into the second section, did you have anything else to add on that one? Stig? Yeah, I have a few things for the first section as well. One thing that I really liked was when the Tony Robbins was saying

Starting point is 00:10:10 that money is like religion and politics. Everyone seems to have a strong opinion. And that was something that really resonated with because it's really hard to discuss money with people because everybody, probably including myself, things that they have the truth. So that makes really, really hard to discuss. And perhaps that's also one of the reasons

Starting point is 00:10:30 why so many have problems with money because it's really hard to discuss it. It's really hard to get smarter because there doesn't seem to be like one truth when it comes to money, just as well as religion and politics, I guess. But still, Tony Robbins sets out some basic rules that everybody should follow.

Starting point is 00:10:50 And for instance, the first rule was that you should pay yourself first. And for anyone who had been studying how to get wealthy, this probably doesn't come as a newsflash to them. But basically, what he's saying, that a very objective rule that no one can argue with is that the path to become financial independent is to pay yourself first. So basically that means that if you make $100, $100, then you would set aside $10 at the beginning

Starting point is 00:11:17 and every month before you do anything else. He highlights a few, like basic rules that everyone should follow. And I think that's a really good way of kicking off the book. So I got a piggyback on your first point there with everyone's got an opinion. And a lot of the times their opinions aren't based on much information at all. And so I'm currently reading, and Stiggs also currently reading a book called Influence. And in that book, it is, first of all, this book's unbelievable. I'm thoroughly enjoying this book.

Starting point is 00:11:50 But one of the things that they talk about in that book is how people have these, they oversimplify things in order to adapt to their environment. Because all day long, you're just constantly sensing all these different inputs and all these different variables. And so the mind over time adapts these principles that it will oversimplify things and then you as a person just make these hardline opinions and stances on maybe just a couple variables. And it talks about how dangerous that is as a person. And so when you look around and you see people, you know, maybe you're talking about oil at work because that's a hot topic right now or whatever. It's amazing how fast everyone simplifies things and says, oh, well, it's because of this. and then their opinion's done and it's over right then and there. So something really kind of important to talk about or to think about, which Stig just highlighted, is don't be so quick to jump the gun on what is or what is not.

Starting point is 00:12:49 You've got to collect a lot of variable and you've got to thoroughly understand something before you just dive in and say, this is what it is. So kind of a tangent there, but you just kind of triggered something that I was recently reading in it. I found it very interesting. So, okay, let's go to the second section here. And in the second section of the book, he talks about shattering financial myths. And he comes up with quite a few, I think there's like seven or eight, but we're just going to talk about a few of them here. So the first one that he talks about is that 96% of actively managed mutual funds do not meet the market over a sustained period of time. This is something that we talked about in one of our previous episodes.

Starting point is 00:13:25 But if you think that you're going to read this book and you're going to have the idea that owning a mutual fund is a good idea, that is not going to have. That is not going to happen. The one thing that you'll definitely walk away from after reading this book is that mutual funds have a devastating impact to your investing future compared to index funds or something else that has lower fees. So that was really one of the first points or myths was the debunking mutual funds. So the second thing that he talks about is that fees are a small price to pay. And what he means by this is that he says that if you think that you're just paying a 2% fee and it doesn't have that much of an impact, you'd be dead wrong. And so he lays out these different fees and he shows how the difference in your overall growth rate would be. So let me just explain some of these.

Starting point is 00:14:18 So he says the average mutual fund has a 3.17% fee associated with it. So right out of the gate, your average mutual fund is a 3% fee. So just remember that as I go through this next section. So he says three funds all starting at $1,000. Okay, so we got three different funds. One's at a 1% fee. The next is a 2% fee. And the third is a 3% fee.

Starting point is 00:14:42 And they're all starting out with $1,000. And he says after 30 years at an 8% growth rate, here's which you would have with each one of those funds. So the first fund at 1% you'd have, you'd turn your $1,600 into $7,600. The second one that had a 2% fee, you'd have $5,700. And then the third one with 3% fees, you'd have $4,300. So going from a 1% fee to a 3% fee,

Starting point is 00:15:12 you've almost taken your growth over a 30-year period and cut it in half. And that's the thing that I think a lot of people do not understand when it comes to mutual funds. And this was something that I give them huge kudos for in the book for outlining how devastating just a 2% increase fees can have on your investment future. So that's something to really a key takeaway from the book. Yeah, just a piggyback on that, Preston. I think that Robin said it best when he said that you shouldn't play any game if you don't know the rules. And I think that most people can resonate

Starting point is 00:15:46 with that. I mean, they wouldn't play football if you didn't know how to play football. But it seems like when it comes to investing, it's just everybody's game. Then they were just into a game where the odds are just basically against them. I mean, they can't be lucky to pick the best or their Locky mutual fund, but in general of the odds are just against them. Yeah, and that's how he started off, just to kind of highlight, he started off this whole section of shattering financial myths with the idea that Stig just said as far as knowing the rules before you start the game. So this next myth was really kind of an interesting one, and he says that all funds returns

Starting point is 00:16:20 are not 100% truthful. And what he meant by this is that he says that a lot of, what a lot of these big banks do is they might start five mutual funds or five funds. And of those five funds that maybe go for five years, okay, they've been in existence for five years, one or two of those five funds will actually have decent returns or decent results. And so what the big bank does is they kill the three or four mutual funds that did bad. They prop up the one who did well. They produce a bunch of marketing material behind the one that did well, and then they send that out as if that was the sole result. But what you're not seeing and what's not truthful is that the big bank basically had a 20% track record because only one of the five actually did well.

Starting point is 00:17:07 And they're not even showing you the results of the other ones at all failed. And so it's basically like this law of probability with the mutual funds. So then what they do is they prop it up. And through marketing, they're able to sell these funds to different people to make it look like they've done really well. When in fact, they're doing really bad in the grand scheme of things and from the big picture. Another thing that they're doing, I think this is just really horrible, is how they manipulate the returns. So for instance, if you imagine the mutual fund having 100% year one and then they're losing half the next year, then by simple calculation you would see that they were just starting, they're just ending the same way as they're starting with a 0% return.

Starting point is 00:17:50 But what some of these mutual funds are actually doing is that they're saying, well, we got 100% one year and minus 50% the second year. So that must be a 25% return on average. Yeah. And that was something I was really surprised about that someone would do. I can say the one thing I really did like about the book was all the research and the stats that he had for the performance of some of the different financial instruments. I found that very useful and very truthful. And it was nice to have somebody just kind of shed some light on all this stuff because I think a lot of there's a lot of propaganda and a lot of marketing on Wall Street and a lot of these big banks to try to keep this stuff. out of the purview of the general public, and I think Tony did a great job highlighting all that stuff.

Starting point is 00:18:33 So as we go to the next point here, the next one that we had highlighted out, we didn't get all of them, but we highlighted a few of them. The next one he had was, I'm your broker, I'm not here to help. And in this section, he talks about how Morningstar showed a report that 49% of mutual fund managers owned no share, not a penny in the fund that they actually managed. And so then he went through all the different dollar thresholds above that. So I'm just going to highlight the top dollar threshold. And only 9% owned over a million dollars in their own fund. So 10% of mutual fund owners out there or fund managers actually own fund above a million dollars.

Starting point is 00:19:18 Because anything under that, I mean, most of these guys are very wealthy people. So for them to have $10,000 in their fund, I'd basically write that off as them not even having money in their fund. that's just so they can say that they have money in their fund. So when you look at those stats and you look at the numbers, it's actually quite scary when you see that. So the magic question that Tony says in the book, he says, so if people who manage the fund aren't investing in their fund,

Starting point is 00:19:44 they run, how in the world would I? And he says, that's a great question. So, and I would totally agree with him. I don't even know how you could possibly answer that. So there's more myths in the book.

Starting point is 00:19:56 Those are just the ones that we're going to cover here on their brief overview of the book. But there's other ones that he highlights, and they're very useful, really interesting, and it's kind of fun to go through those. So in the third section of the book, Tony has a section called, What's the Price of Your Dreams? And I really liked how he kicked off this section, because he was talking about one of his events where he was doing his motivational

Starting point is 00:20:20 speaking and life coaching. And in that, he asked the people, you know, what is it in your life? what is your goal that you want to have? And one of these gentlemen in the back raised his hand. And so Tony called on him and the gentleman said, I want to have a billion dollars. And so Tony just kind of smiled and, you know, he thought about it a little bit. And the way that he approached his response to the guy, he says, okay, well, why? Why do you want to have a billion dollars?

Starting point is 00:20:50 And I don't think the gentleman was probably anticipating that kind of response, but it was a very important. question to ask because I think a lot of people say, I want to be a millionaire, or I want to have five million dollars. And they have no idea why they want to have that sum of money. And so the point that Tony gets to is what is the lifestyle you plan on living? And at what age do you plan on living it? And use that as your foundation and as your starting point for looking back in time of how you're going to get there and why you actually need that sum of money. Are you going to own a $300,000 house and live off of $50,000 a year from $60 to $80? Because if that's the case, you don't need $10 or $15 million.

Starting point is 00:21:43 So the question really kind of imposes a lot. And it was really neat, the scenario in the book, he talks about this guy saying he needs a billion dollars. And so Tony says, well, why do you need a billion? And the guy says, well, I want to have my own jet. And so Tony says, well, you can lease jets with net jets. You know, I only fly this many times a year. And I feel like I fly all the time. And that only costs me, you know, $350,000 a year for that much flying.

Starting point is 00:22:09 So you don't need to own a $60 million jet and charter the crew. So then the guy says, well, I want to own my own private island. And so then Tony comes back and goes, well, that's kind of interesting. I own my own island. and I'm only there two weeks out of the year or something like that. He says, and so if I would rent the island for those two weeks out of the year, like I guess Richard Branson rents out his private island and all these. If you would rent it out, it would only cost you $50,000 instead of owning a multimillion dollar island.

Starting point is 00:22:40 And he just kind of goes through the thought process and he's throwing out these ideas to this guy of, hey, you need to think differently and you need to think, where do I want to be and how's the best way that I can get in? And what's the most affordable way I can get it and most realistic way that I can get it? And I think that it was a really good discussion. It was really kind of a fun topic in the book. Let's take a quick break and hear from today's sponsors. All right. I want you guys to imagine spending three days in Oslo at the height of the summer.

Starting point is 00:23:07 You got long days of daylight, incredible food, floating saunas on the Oslo Fjord. And every conversation you have is with people who are actually shaping the future. That's what the Oslo Freedom Forum is. From June 1st through the 3rd, 2026, the Oslo Freedom Forum is entering its 18th year, bringing together activists, technologists, journalists, investors, and builders from all over the world, many of them operating on the front lines of history. This is where you hear firsthand stories from people using Bitcoin to survive currency collapse, using AI to expose human rights abuses, and building technology under censorship and authoritarian pressures.

Starting point is 00:23:46 These aren't abstract ideas. These are tools real people. are using right now. You'll be in the room with about 2,000 extraordinary individuals, dissidents, founders, philanthropists, policymakers, the kind of people you don't just listen to, but end up having dinner with. Over three days, you'll experience powerful mainstage talks, hands-on workshops on freedom tech, and financial sovereignty, immersive art installations, and conversations that continue long after the sessions end. And it's all happening in Oslo in June. If this sounds like your kind of room, well, you're in luck because you can attend in

Starting point is 00:24:21 person. Standard and patron passes are available at Osloof Freedom Forum.com with patron passes offering deep access, private events, and small group time with the speakers. The Oslo Freedom Forum isn't just a conference. It's a place where ideas meet reality and where the future is being built by people living it. If you run a business, you've probably had the same thought lately. How do we make AI useful in the real world? Because the upside is huge, but guessing your way into it is a risky move. With NetSuite by Oracle, you can put AI to work today. NetSuite is the number one AI cloud ERP, trusted by over 43,000 businesses. It pulls your financials, inventory, commerce, HR, and CRM into one unified system. And that connected data is what makes your

Starting point is 00:25:10 AI smarter. It can automate routine work, surface actionable, and insights and help you cut costs while making fast AI-powered decisions with confidence. And now with the NetSuite AI connector, you can use the AI of your choice to connect directly to your real business data. This isn't some add-on, it's AI built into the system that runs your business. And whether your company does millions or even hundreds of millions, NetSuite helps you stay ahead. If your revenues are at least in the seven figures, get their free business guide, demystifying AI at net suite.com slash study. The guide is free to you at net suite.com slash study. NetSuite. When I started my own side business, it suddenly felt like I had to become 10 different people

Starting point is 00:25:57 overnight wearing many different hats. Starting something from scratch can feel exciting, but also incredibly overwhelming and lonely. That's why having the right tools matters. For millions of businesses, that tool is Shopify. Shopify is the commerce platform behind millions of businesses around the world and 10% of all e-commerce in the U.S. from brands just getting started to household names. It gives you everything you need in one place, from inventory to payments to analytics. So you're not juggling a bunch of different platforms. You can build a beautiful online store with hundreds of ready-to-use templates, and Shopify is packed with helpful AI tools that write product descriptions and even enhance your product photography.

Starting point is 00:26:40 Plus, if you ever get stuck, they've got award-winning 24-7 customer support. Start your business today with the industry's best business partner, Shopify, and start hearing sign up for your $1 per month trial today at Shopify.com slash WSB. Go to Shopify.com slash WSB. That's Shopify. All right, back to the show. Stiggy, you had something you wanted to add. Yeah, I don't know about you, Preston, but, you know, I was really curious.

Starting point is 00:27:14 So I started, of course, to do the calculation for myself. And, you know, Robbins was completely right. You don't need that much money. He had this very neat equation. And when I say you don't need that much money, of course, you need a lot of money to become financial independent. But as Preston was saying before, you probably don't need like $5 million. And definitely not $1 billion to become financial independent. But Tony Robbins is saying you might use something like 6% as a return.

Starting point is 00:27:43 Now something like 6% on your principal. So a very need of way of thinking that is saying, how much money would I need a year to live a lifestyle I want to do and then multiply that with 16, simply because it's 6%. So if you need something like, I don't know, $100,000, and I can definitely live off $100,000, but just take that as a generic example,

Starting point is 00:28:05 then you would need $1.6 million. And still it might seem like a lot of money, but you can just cut that in half and say, I can probably live up $50,000. And then you need $800,000. And I think even though that's a lot of money is probably a lot less than what most people think that they need before they can become financial independent.

Starting point is 00:28:26 And I think one of the other important points with this section was when you set such lofty goals that really aren't tied to any realism to them, It's exhausting. Okay. And it puts you in a position where you set the goal and then a year later you realize, hey, this is, you know, just totally impossible. And you give up altogether. And so your chance of success greatly diminishes whenever you don't put the end state

Starting point is 00:28:54 in a reasonable site picture for yourself of how you're actually going to get there. The goal is so unrealistic that it's just, it's a dream, you know. It doesn't even make any kind of sense. So I think that that was really important to set that benchmark for yourself. And I just wanted to highlight stick. So the thing that I was thinking about whenever I was reading this, whenever he talked about the rental of his own private island, I was thinking, how can we possibly put an event together for the investors' podcast community

Starting point is 00:29:23 so that we could rent out our own island and then everyone can come there and we can just have a blast. But that's probably going to happen in about a year from now. Stig and I did not talk about that. You wouldn't believe it. I thought they expect the same thing. See, that's why you and I, don't worry about a buddy. We're going to have fun. And you know what?

Starting point is 00:29:42 The best part is is the whole community is going to enjoy it too. So we'll put that out there. Probably, you know, I'm not going to happen for maybe a year or so, but, you know, we'll dig into it and we'll research that for everybody. Okay, so all joking aside, here we go into the fourth section. And we really weren't joking about that. We were moderately serious. So just kind of keep your eyes and ears tuned. probably more about that later.

Starting point is 00:30:06 But in section four, Tony, the section of the book was called Make the Most Important Investment Decision of Your Life. And in this section, Tony talks about the importance of asset allocation. So this is obviously something that Stig and I totally agree with as far as where are you putting your money and when are you putting your money into those specific types of assets. So I think that, you know, my personal opinion is in the book. he talks about how important this is, but as far as the execution of it, I think he kind of missed the mark on how a person can actually apply this because he doesn't really get into how time is extraordinarily dynamic with the valuation of assets. And as time continues to march on,

Starting point is 00:30:52 you are adjusting your asset allocation based off of opportunity cost. And that isn't something that I really got out of the book that I saw that he explained real well. So just maybe maybe I just saw it differently than other people, but the way I see it and the way I treat asset allocation is that I'm constantly making a comparison. I'm looking at the value of the assets that I own today and what return rate I will get based on how they're priced in the market today. And I'm comparing it to what else I could find that might have a higher return. If I can't find something after I pay capital gains tax, I keep it where it's. at. But if the market conditions change, let's say that we went into a market collapse and all the stock prices dropped. So whenever I see that situation, my opinion is that the stocks became a lot

Starting point is 00:31:44 more valuable and that I'm going to get a higher return because they're lower in price. So then I buy more stocks. And so my asset allocation is a very dynamic thing and it's something that's constantly changing based on relative factors. And I don't think that that's something that he addressed real well in the book. But he did say that asset allocation is the most important thing. that you can do. So Stig, go ahead. You had a point? Yeah, because I completely agree with you, Preston, because what I just heard was that you kept talking about the return, that you want to optimize your return. A theme in this book is really to mitigate your variance. I mean, you don't want to have volatility. And why I think that to some investor in some situation is a good

Starting point is 00:32:26 idea to limit your volatility, I think that perhaps Robin is really not, you know, looking at this the right way. I'm definitely thinking about how to optimize returns. I'm not thinking about how to mitigate my variance volatility, and especially not in the short run. So that was just something that took away from the book. Yeah. You know, at the end of the day, I could care less about variance.

Starting point is 00:32:50 I mean, maybe be a hard-line stance, but the thing that isn't changing is my percent of equity that I own. And that's what I care about. I don't care whether the stock went from $40 to $1,000, $30. I care in the sense that I might buy some more of it or that I might re-look at maybe why it had gone down, but I still own the same percent of equity that I had before or after a crash or a boom cycle or whatever. So the thing that I'm looking at isn't necessarily the concern over, oh, my gosh, the market has priced my equity differently. I'm looking at how

Starting point is 00:33:30 can I capitalize on this opportunity of the market pricing my equity at a different price point? And I think that is how people have to look at it, is you still own whatever percent of a company. That didn't change. The only thing that changed was the representation of how other people view the value of it. And if they're wrong, and you have to know, understand accounting to do that on an individual stock basis, but if you know that they're wrong and you understand what the real value of the company is going forward, it should not concern you in the least bit. I guess I always look at it from, if somebody came along and looked at my personal company that I own and they said, well,

Starting point is 00:34:08 I think it's worth this. And then the next day they tell me they think it's worth half, I'm going to laugh at them. And that's because I know the value of my own company. And so I guess I look at stocks in the exact same light, even though I'm not personally managing a particular stock, call it Berkshire Hathaway, Warren Buffett is. If somebody comes along and says that it's worth half as much the next day. I'm looking at that in the same ownership light that, no, it's not. It's worth this. So if you're going to sell it for that, I'm willing to buy more of it. And I think that that's kind of, you know, that gets into our whole value-based philosophy. But just something I wanted to throw out there about asset allocation is it's very important to

Starting point is 00:34:49 ensure you are buying bonds at the right time. You're buying stocks at the right time. because if you're not, you're going to get smoked. But, okay, that's all I got for that. Yeah, and he also talks a bit about rebalancing your portfolio. And I think we're on the same side here, Prest, because I don't believe that you should always have 20% in equity or always have, like, 40% in bonds. I think it really just depends on the circumstances.

Starting point is 00:35:15 And I think that if you're looking for this magic formula about your asset allocations, and always aim to rebalance according to that formula, I think you're really heading for trouble. I think you're not looking at what is our surroundings, what's the most optimal thing to do. And you forget to think for yourself and just stare at a formula. And I think that's probably the wrong approach to take. So it's funny you should mention magic formula because we're going into Section 5 stick.

Starting point is 00:35:41 So in Section 5, Tony's book, this is where things even get more interesting. So he says, upside without the downside for Section 5. And so in this, he talks about, and I mean, you could not have had more propaganda in this book leading up to this section. I'm just going to throw that out there. I was not happy with the way that the book progressed and the way that it just blew the reader's attention up as to Section 5 is coming. Section 5 is coming. And what is in Section 5 is that Tony had an interview with Ray Dalio, who is an American businessman and founder of the investment firm Bridgewater Associates. And in 2012, Dahlia appeared, just to kind of give you a little bit of a background on Ray Dallio, he appeared in the annual time 100 list and 100 most influential people in the world.

Starting point is 00:36:35 He's worth, what's he worth, $15.2 billion. So he's the 69th richest person in the world. So Tony Robbins had an interview with Ray Dallio, who runs this fund. In the finance sector, Ray Dalu is pretty much regarded as one of the best. money managers out there. So Tony gets this interview with them. And Tony basically would sound like to me in the book, through a little coercion, said to Ray, help out the average person, help them out.

Starting point is 00:37:06 What is the allocation, going back to asset allocation, what's the asset allocation that Americans got to have to protect their downside? And so he gets Ray Dalio to say what the asset allocation. of his all-weather fund was. So here it goes. So I'm going to tell you what it is. It was 30% in stocks, 40% in long-term U.S. bonds, 15% in intermediate bonds, 7.5% in commodities. And I'm trying to say this with a straight face. It's 7.5% in gold. Man, I don't even know where to start with this. I was a little frustrated when I read this. I'm not going to lie. I don't even know what to say. I don't even know what to say. I was just a little frustrated with this. And I think that the other thing, too,

Starting point is 00:38:01 that Tony might have taken out of context here is I don't know if Ray was saying that that's where he was currently sitting or if this is where you should constantly keep these percentages in the portfolio, but I don't even know what to say. So go ahead. Yeah, I think it's probably a good way to start

Starting point is 00:38:17 is to discuss why gold is probably not a good investment. And this is not the same as saying as gold cannot increase 20% tomorrow. I'd have no clue where the gold price is going. But if you invest in gold, you basically hope that the guy next door comes around and offer you a higher price that what you paid for gold. That's just not a viable investing strategy. If you, on the other hand, for instance, invest in equity, then you know that this equity is producing income. And that income in the end goes back to the investor. And again, I have no clue if the stock prices will drop in half tomorrow is just the fundamental and underlying thing about equity is just much

Starting point is 00:38:59 better than gold, for instance. So I understand why Preston said he couldn't say this with a straight face because, you know, I can't see why people will hold golden in general. How can you value gold? It's a metal. It's not producing anything. It's not like it's a business that's creating some type of product and making money. So the only way you're going to make money on gold is if it continues to track inflation, which it does, and it goes up. So if you're looking for some type of protection against inflation, gold's probably a good place to put your money. If you plan on holding it for the long haul, if you're planning on doing it a short term, yeah. But if you're looking for something that's going to beat inflation, then I would

Starting point is 00:39:39 recommend you buy some type of business or some type of bond that's, that is like a tip that's protected by the inflation rate, that's a much better form of, like to invest in 7.5% gold instead of a tip just doesn't even make sense to me. But go ahead, Steve. Yeah, I really don't know what all the fuss was about because when I heard about this magic formula,

Starting point is 00:40:06 I was thinking, you know, this is how you get a 30% annual return. And then I think it was like 9.8 or something like that. I mean, still it's a decent return. but you're more or less, you know, get a market return. So what was all the fuss about? And to answer that myself, that was really just to limit your volatility of your portfolio. And, you know, that might be a nice thing,

Starting point is 00:40:26 but, you know, if anything, I see volatility is a great thing, because volatility allows me to buy at good prices and sells at even better prices. I'm not looking at, you know, my portfolio as, where the end goal is just to limit my volatility. I think that's the wrong way of looking at investing. I think you're exactly right on this.

Starting point is 00:40:45 I think that Tony was writing this book for a certain market. And I think the market was people that were scared to death after the 2008 crash. And he didn't want people to have to go through that fear and emotional cycle once again. And what I think he's really trying to do here is to help people to never have to experience that massive drop in their net worth ever again. And so I think if that's who you are and you're trying to just protect your downside and not have to ever experience. that and you're not too concerned about beating the S&P, that's probably a decent approach for you. But I think if you're just trying to get S&P 500 returns or better, I think that this would be a very difficult way to do it by using that asset allocation that he says. My personal opinion, the guy who said it, he's worth $15 billion.

Starting point is 00:41:38 So maybe he's got a lot better advice than I do. But that's just my opinion. Yeah, and also because it's easy to say in theory. It's easy to run through models and saying this, this is the optimal allocation. You don't have any transaction costs. We real balance every quarter. And we have a computer doing that and looking at the return the last 50 years. But that's not just, that is not how a private investors invest.

Starting point is 00:42:02 I mean, it doesn't work like that. Yeah. Yeah, I totally agree. Okay. So I think we addressed the fifth section here, which was Ray Dalio's All Weather Investment strategy. And you know what? Read the book for yourself. Don't let us bias your opinion. Go in there with a clear mind. Read through it because there's a lot of stuff that we're not talking about that are also mentioned in that section. So go through that. Read it for yourself. See what you think.

Starting point is 00:42:27 And then, you know, come up with your own opinion. I don't want to dictate your opinion. Okay. So let's go here and go into section six. And this is a, this is my favorite part of the book. This was a very good transition. To be quite honest with you, after section five, I almost stopped book. But then I got into Section 6 and I was very happy and actually quite excited with some of the information that was in here. And what he does is he goes through and he has these interviews with all these high-powered investors and he just asked some really good questions about their best investing advice and things like that. So instead of talking about each person that he interviewed, we highlighted just a few. So the first person that Tony interviewed in this Section 6 was

Starting point is 00:43:12 Carl Icon and Carl Icon is worth $25 billion and he's actually had better returns as a percentage than Warren Buffett. In fact, from 2000 to today, from the year 2000 to today, his returns have been 1,622% when compared to the S&P 500, which was 73%. So you can actually invest in Carl Icon's company. His ticker for his company is IEP. He pays a very large dividend. And it's something that I've been kind of closely looking at lately. I don't own any stock in IEP. But so Carl Icon's points that he talked about. One of the things that I found interesting was his main point was he talks about the corruptness of the board of directors for a lot of the different companies and how he attributes 90% or more of the poor performance of a company to the

Starting point is 00:44:05 poor management. So that was something that really kind of made my eyebrow go up and I was like, huh, that's kind of an interesting point. And he talks about this relationship between the CEO and the board of directors and how whenever he's investing, he's basically looking for a business that has a good competitive advantage, that has a good product or service, that has really crappy management or leadership on the board. So the reason that he gets a lot of negative connotation towards his name and investing is because he comes in and he buys a majority stake or some type of controlling share of a business that has this bad management and he basically forces the CEO or the management out of it or he creates this new dynamic within the board

Starting point is 00:44:49 in order to change the stock price or the direction of the company. You recently saw Apple, what was it, maybe a year and a half ago, year ago, really take a massive hit after the Steve Jobs had died and the company was just, you know, fluttering. And Icon came in and bought a very large chunk. You saw the stock price stabilized. You started seeing it come back up. And I think a lot of that was due to maybe the psychological factors that Carl Icon got so involved. He had them start paying a dividend. He did all these kind of things and you now see Apple's stock price starting to come back up and come back in. So a very interesting guy. It was a very interesting interview. But one of the that I wanted to throw out there was just how he views management and the board of directors and how 90% of the time it's their fault whenever a business isn't doing well. So the next person that he interviewed that I really wanted to highlight that I got a lot out of was John Bogle. So we talked a little bit about John Bogle on our ETF episode. And John Bogle, I want to say he's worth like $100 or $200 million. And he was the founder of Vanguard with index funds. So when we

Starting point is 00:46:02 talk about how index funds are better than mutual funds, it's all because of John Bogle. So some of the quotes that I pulled out of John Bogle's interview. So here, I'm going to read through some of the quotes. The first quote, I'm going to tell you everything you need to know about the stock market. Nobody knows nothing. So I like that one. The next one, the manager is taking half the dividends to pay himself in reference to mutual funds. Here's the next one. The fact is that over the long term, half the time, half the money, you returns in the stock market have come from dividends. I really like that quote, and I think that that's something that a lot of people lose sight of. Whenever you go in and you really start to

Starting point is 00:46:42 really quite understand accounting, when you go in and you look at the cash flow of the business, then you look at that free cash flow, and then you look on the cash flow statement and you look at how much they're paying out on dividends. Typically, when you look at that comparison, the dividend typically makes up about 30 to 50% of the actual free cash flow. And that's what a lot of people don't realize whenever they're stock investing. So they'll look at the market price and then they'll look at, oh, well, it's paying a 2% dividend. And they just write it off as 2%. But when you look at the company's capacity and ability to actually pay that dividend, it's really kind of sucking about 30 to 50% of the free cash flow. So that's what Bogle is talking about kind of in this

Starting point is 00:47:25 quote where he's talking about how fund managers are basically sucking up all the dividends. And all you're getting is the market price from the remaining free cash flow. So just kind of a really neat quote that I saw there that I kind of empathize with or kind of understood just because of our background in accounting. Let's take a quick break and hear from today's sponsors. No, it's not your imagination. Risk and regulation are ramping up. And customers now expect proof of security just to do business.

Starting point is 00:47:55 That's why VANTA is a game changer. VANTA automates your compliance process and brings compliance, risk, and customer trust together on one AI-powered platform. So whether you're prepping for a SOC 2 or running an enterprise GRC program, VANTA keeps you secure and keeps your deals moving. Instead of chasing spreadsheets and screenshots, VANTA gives you continuous automation across more than 35 security and privacy frameworks. Companies like Ramp and Ryder spend 82% less time, on audits with Vanta. That's not just faster compliance, it's more time for growth. If I were running a startup or scaling a team today, this is exactly the type of platform

Starting point is 00:48:35 I'd want in place. Get started at Vanta.com slash billionaires. That's Vanta.com slash billionaires. Ever wanted to explore the world of online trading, but haven't dared try? The futures market is more active now than ever before, and plus 500 futures is the perfect place to start. Plus 500 gives you access to a wide range of instruments, the S&P 500, Nasdaq, Bitcoin, gas, and much more. Explore equity indices, energy, metals, 4X, crypto, and beyond. With a simple and intuitive platform, you can trade from anywhere, right from your phone.

Starting point is 00:49:15 Deposit with a minimum of $100 and experience the fast, accessible futures trading you've been waiting for. See a trading opportunity, you'll be able to trade it in just two two clicks once your account is open. Not sure if you're ready, not a problem. Plus 500 gives you an unlimited, risk-free demo account with charts and analytic tools for you to practice on. With over 20 years of experience, Plus 500 is your gateway to the markets. Visit plus 500.com to learn more. Trading and futures involves risk of loss and is not suitable for everyone. Not all applicants will qualify. Plus 500, it's trading with a plus. Billion dollar investors don't typically park their cash in high-yield savings accounts. Instead,

Starting point is 00:50:01 they often use one of the premier passive income strategies for institutional investors, private credit. Now, the same passive income strategy is available to investors of all sizes thanks to the Fundrise income fund, which has more than $600 million invested in a 7.97% distribution rate. With traditional savings yields falling, it's no wonder private credit has grown to be a trillion dollar asset class in the last few years. Visit fundrise.com slash WSB to invest in the Fundrise income fund in just minutes. The fund's total return in 2025 was 8%, and the average annual total return since inception is 7.8%. Past performance does not guarantee future results, current distribution rate as of 1231, 2025. Carefully consider the investment material

Starting point is 00:50:52 before investing, including objectives, risks, charges, and expenses. This and other information can be found in the income funds prospectus at fundrise.com slash income. This is a paid advertisement. All right. Back to the show. I really liked his example about flipping coins. And I'm not saying that I completely agree with that.

Starting point is 00:51:12 It's just something interesting to think of. He's saying that if you put like a thousand people in the room and you'll ask them two by two to flip a corn. And the winner will just, you know, continue in the flipping corn tournament. Then after 10 cornflips, you'll have one winner. And in investing, you will call him, you know, the most brilliant investor. And in all other aspects of life, you'll just call him a lucky man. And I think that was just such a great quote about mutual funds and why you should not trust mutual funds,

Starting point is 00:51:43 because someone will just always get lucky. Yeah. Okay, so the next quote that I got from John Vogel that I really liked, he says, at 6.95%, you turn $1 into $30 over a 50-year period. But at 5%, you get $10 instead of $30. He said, so what does that mean? It means that you put up 100% of the cash, you assume 100% of the risk, and you get 30% of the reward. And that quote for me is just amazing because it's really getting to the essence of what an index fund does over a mutual fund is that when you're actually,

Starting point is 00:52:21 consciously choosing a mutual fund over an index fund, you're consciously making this decision to make a 30% reward when you could actually have 100% reward for your investment. So that was a very powerful quote that he had when he was talking with him. And then the last one that I'm going to highlight from John Bogle, he says, in reference to shows like Squawk Box and Mad Money, he has this quote. He says, all the yelling and screaming and buy this and sell that, that's a distraction to the business of investing. Take your kids out to the park. Take your wife out to dinner and read a good book. I love that quote. It was awesome. Okay. So the last person that we're going to talk about,

Starting point is 00:53:01 and he had about 10 different billionaires and like high powered investors that he interviewed in this section. It was an invaluable section. I think the value of the book was totally worth just this section alone, to be quite honest with you. And if you just like skip everything else and just read this section, I think it'd be very beneficial. So the last person, that he talked to was John Templeton, and John Templeton died after this interview. And I want to say John Templeton was worth close to a billion dollars whenever he died. And he says that bear markets start on the time of pessimism. They rise on the time of skepticism.

Starting point is 00:53:34 They mature on the time of optimism. And they end on the time of euphoria. And that's a really important quote to kind of just understand the boom bust cycle and the market psychology that's occurring at each one of those junctions as the market progresses. So at the very end of his interview, and Stig, you had something you wanted to add on John Templeton. Go ahead. No, I just think he had a great point about, you know, the biggest problem is that people

Starting point is 00:54:00 don't save. You know, because he was really raging against all this, you know, how to optimize this and optimize that. And he's saying, we have to go back to the very beginning. It's like if you can't save, you don't know how to save, you know, don't focus on how to optimize return. And he's very famous for only spending like 50% of every dollar that he means. made. And he continued doing that from his, from his early years until he died. And yeah, and he

Starting point is 00:54:24 almost got billionaire. You know, as a human being of all the people that he interviewed, the one that I was most impressed with was John Templeton with some of his responses. And just to kind of highlight some of his quotes here that he said that really impressed me. So one was, so I don't think an attitude of gratitude will prevent a life of fear. And he's talking about the idea that whenever you get scared in the market or whatever, he says the easiest way to ever get a fearful thought out of your mind is to be grateful and to show some type of gratitude towards the situation that you're in. And I found that very profound.

Starting point is 00:55:04 And, you know, that's something that I try to think about every time whenever I go through some type of experience like that. And then the last quote that I want to highlight, and it's a good bridge into the last section of the book, John Templeton said, do not try to be a go-getter, try to be a go-giver. And I know you guys probably heard the interview that we had with Guy Speer, and that was one of the biggest takeaways that I had from that interview is just how giving Guy is.

Starting point is 00:55:29 And I'll tell you, after we stopped that tape and talked with Guy, I can't even describe how Guy was just trying to help us and just trying to do everything he could to just give everything to us. And it was just kind of, it was a little overwhelming, to be honest with you. It was just kind of an amazing point in my life that I just realized how important that really is. And I hope that, you know, you guys got the same thing out of the interview that we had with them. But just to hear another person, you know, John Templeton be saying the same message over and over again. It just reinforces how important that is to me.

Starting point is 00:56:05 And so in the last section of the book for Tony, Section 7, he says, just do it, enjoy it. and share it. And so he really puts this, you really see how much of an optimist Tony is in this last section because he's just talking about how the world's going to progress. And you can see how well ready is on different technologies and just if you really think that the world's going to be a horrible place for you, it's probably going to be a horrible place. But if you think that it's going to be somewhere that's going to grow and prosper, it's going to grow and prosper. So that's kind of the takeaway that I had from the start of the last section. And then at the end, of the last section, he talks about all of his philanthropy and how it is impacted his life

Starting point is 00:56:48 and how everything that he's given has always come back to him in multiples. And I couldn't agree with that more. I know I've had personal experiences in my life where I've just given to different charities, to different philanthropies. And sometimes within a day, I have seen that comes straight back into my life. And to be honest with you, it's, it's. It's kind of a little overwhelming and just amazing to experience that firsthand. So I thoroughly enjoyed the last section of this book.

Starting point is 00:57:21 And to be honest with you, the last section of the book really kind of changed my whole opinion of the book. I thought that the beginning with the Ray Dalio thing was kind of frustrating for me. I got kind of frustrated through that section. But as I read the last two sections of this book, I absolutely loved it and really thoroughly enjoyed it and had a great emotional experience. as I finished the book. So, Stig, I know you got some things you want to add. Yeah, and I completely agree with you, Section 6 and Section 7 was really strong, and I learned so much from it.

Starting point is 00:57:55 And I think that one of the things that really enjoyed about Section 6 and Preston, you already gave some great quotes and talked about a few of those billionaires, is that all billionaires in this book, they had something like very, you know, they had something in common. They had something that characterized them. And I think that the first thing that they really characterized all of them was that they kept learning. And I think that was really something that I took away from the book, except perhaps for Adelio, and he might be misquoted. You know, none of them was looking for like a magic formula.

Starting point is 00:58:27 They kept learning and they kept, you know, improving themselves and they kept adjusting to the new environment. And that was probably what's really making them unique. You know, they were never satisfied with what they're doing. And they weren't talking about retirements. Some of these people are definitely above 60 or 70 years old, but they were still going strong. They were doing that because they just love what they're doing. They love getting smarter. They didn't get smarter because they wanted to be wealthier.

Starting point is 00:58:52 They were smarter because they just love getting smarter. And there was something that I think really characterized these very successful people. So I want to add something on top of what Stig just said, because this is something that we're doing with the podcast right now is we developed a list of all these days. different billionaires. And we went and researched all their favorite books. And we've got a list, I think there's maybe 65 books on the list. And we list, you know, Mark Cuban, these were his favorite books or Elon Musk. These were his favorite books. Sergei Bryn. And then we list his favorite books. And we've got this big list and we're getting ready to publish it and we'll link to it on the Investors podcast so you can see all this. But we're using that list of books that have influenced

Starting point is 00:59:37 them. And we're using that as our list for the show. So as the show continues to progress and it continues to go into the next year, the books that Stig and I read are going to be these books that we've done the research on that have shaped these billionaires' lives. So we're excited to go on this journey of reading all this stuff. And we're even more excited that we're able to share it with you. So as you continue to listen to the podcast and you continue to see what we're doing, and that's what you're going to be learning. That's what you're going to be going to be going to be going to be tapping into the books, into the minds of all these different billionaires and the things that influence them

Starting point is 01:00:14 and that have made them so great in their lives. So I just want to throw that out there so you guys know. And we'll have that list up and we'll probably send it out on the email list and so everyone has it. But just kind of a heads up of where we're going. Okay, so it's that time in the show where we're going to go ahead and play one of our questions from the audience. And this one comes from Paul Schreeder. And here's his question. Hey, Preston and Stig, my name is Paul, and I'm currently in the United States Air Force serving my time over here in Europe.

Starting point is 01:00:41 Prior to not that long ago, I had no idea how to approach stocks, and it's something that I've always wanted to get into, particularly value investing. And it wasn't until I stumbled upon a book called Warren Buffett's three favorite books was when my eyes were opened. And Preston, I cannot thank you enough for allowing me to start that journey. So two questions. First, how can options and options trade? play a role in value investing. And second, are there any resources that you might recommend to further research the subject of options? Thank you both and keep up the great work. All right, Paul, great question, and this is a very popular question.

Starting point is 01:01:20 A lot of people want to know more about options. And to be quite honest with you, this isn't something that Stig and myself really partaken. So Stig, go ahead and I'm sure you got a response to Paul on how you treat options in the way that you look at them. Well, Paul, great question. As Preston saying, that's not something I really participate in. I think that a lot of people are probably a bit blindsided about the marketing aspects of options. And very often you hear about call options, and that basically that you'll get the upside, but you'll not get the downside. So that might be an option that is attached to S&P 500. And while it seems like a good idea that you don't get the downside,

Starting point is 01:02:04 the way that the math behind an option is really constructed is that you're paying a premium not to take any risk. And, you know, just the way you're thinking about it, you know, in terms of, you know, insurance. You don't win on insurance. You just cover your losses on insurance. And I think that's probably the wrong way to look at investing. So, so in like general terms, that's why I'm not into options trading. And I think it's also, and Stig's highlight of it being like insurance is probably the best way you could possibly look at this. And the only reason to have insurance is whenever you can't pay for the loss of whatever it is that you're insuring. So let's say that you go down to the store and you buy a new

Starting point is 01:02:44 TV and the TV costs $700. If you can afford to replace the $700 TV, there's no reason to put insurance on it. So that's just kind of like our general thought process and how we generally view options. I think the important thing for people to understand when you're thinking about options is options are bound by time. And that's where it gets very tricky and very difficult to be successful. With value investing, there's no time element attached to the stock coming back to the price or the equity coming back to the price that you think it's worth. So let's say I'm looking at Berkshire Hathaway and I think it's worth 20% more than what

Starting point is 01:03:23 it's currently trading for. And that's not a – I'm just using that as an example. So if that's the opinion that I have, I have until eternity to wait for that price to come back up to the price that I think that it's worth. Whenever you get in the options contracts, they're bound by time. So in order for me to be successful, that might have to happen in the next month or that might have to happen within three months. And so the thing that you can't control is the market psychology and how people are going to trade stocks tomorrow. I have no idea, not one clue, if the market's going to be higher or lower on Monday. And I'll tell you what, if somebody tells you that they do know, run away from them as fast as you possibly can.

Starting point is 01:04:05 So when you understand that and you understand that you can't control what's going to happen in the short term, and I consider anything like three years or less, the short term, that's why option trading to us is a very difficult thing to do. Now, I have a really quick caveat as far as resources and researching more on options. So in security analysis, Benjamin Graham talks a lot about detachable security. So if you own a bond, it might have an option to exercise it into stock at a certain price. And you get into these really elaborately constructed securities. That's where you really got to understand how options work, because it might be something that you can actually attach more value to an instrument

Starting point is 01:04:49 or security, knowing that that exists. And you're really getting into graduate level investing when you start talking about this kind of stuff. And it's something that's very important if you're kind of working at that level. But for the normal person that's just going out there and maybe doesn't have all that much accounting experience or investing experience, probably something that you've got to be very careful with because it's not something that I think that people can do successfully in the long term.

Starting point is 01:05:17 When you talk to different people and they're telling you how great they are at options trading, that's typically a short-lived conversation. It might be something that somebody boasts about for maybe three years and then all of a sudden they're not talking about it anymore. But that's just my personal opinion. I would highly encourage you to go research that more. I don't have any good books to recommend to you. Stig, do you have anything that you would recommend other than security? No, unfortunately. Yeah, other than security analysis, which I think is probably not where you want to start.

Starting point is 01:05:45 you've got to kind of really build up to that level. And Stig and I have a summary on security analysis if you want to try to read that first before diving into the whole book. But anyway, that's our opinion on options. And that's all we got for you. So we really appreciate the question. It's a very good question because a lot of people have the same question. But we're going to send you a free signed copy of our book, the Warren Buffett accounting book. And I'm also going to throw in our summary of security analysis for you so you can go ahead and dive into that.

Starting point is 01:06:12 So everyone, we know this was a long episode. We really appreciate you joining in. I think Tony Robbins had some fantastic things to highlight. A few things that we're a little hesitant to recommend. But in general, very good book. I hope you guys enjoy. And we'll send out the free summary that we write the executive summary of the book. It'll probably be about five pages long.

Starting point is 01:06:30 We'll send that out to everybody on our mailing list. So if you want to receive those kind of things, make sure you sign up on our mailing list. So that's all we got for you today. Sorry for the long episode. I think there was a lot we wanted to get out there. But we really love having you guys in our audience. and we are so appreciative for what you do for us. So have a great day and thank you very much.

Starting point is 01:06:48 Thanks for listening to The Investors Podcast. To listen to more shows or access to the tools discussed on the show, be sure to visit www.com. Submit your questions or request a guest appearance to The Investors Podcast by going to www.com. If your question is answered during the show, you will receive a free autographed copy of the Warren Buffett Accounting Book. This podcast is for any of the podcast.

Starting point is 01:07:13 entertainment purposes only. This material was copyrighted by the TIP network and must have written approval before a commercial application.

We Study Billionaires - The Investor’s Podcast Network - TIP 018 : Tony Robbins' Book - Money, Master the Game (Investing Podcast)

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.