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Finding financial certainty in uncertain times

It’s been a year since we released Unshakeable, the book by Tony Robbins and Creative Planning’s Peter Mallouk, the only man in history to be ranked the number-one financial advisor in the United States for three consecutive years by Barron’s. The following is an excerpt from Unshakeable, which you can learn more about and order via its website.

What would it feel like to know in your mind, in your heart, and in the very depth of your soul that you’ll always be prosperous? To know with absolute certainty that no matter what happens in the economy, stock market, or real estate, you’ll have financial security for the rest of your life? To know that you’ll possess an abundance that will enable you not only to take care of your family’s needs but also to delight in the joy of helping others?

We all dream of achieving that tremendous inner peace, that comfort, that independence, that freedom. In short, we all dream of being unshakeable.

But what does it really mean to be unshakeable?

It’s not just a matter of money. It’s a state of mind. When you’re truly unshakeable, you have unwavering confidence even amidst the storm. It’s not that nothing upsets you. We can all get hooked. But you don’t stay there. Nothing rattles you for any length of time. You don’t allow fear to take you over. If you’re knocked off balance, you find your center quickly and regain your inner calm. When others are afraid, you have the presence of mind to take advantage of the turmoil swirling all around you. This state of mind allows you to be a leader, not a follower. To be the chess player, not the chess piece. To be one of the few who do, not one of the many who merely talk!

Wouldn’t it be wonderful if all that uncertainty had ended in 2008? Didn’t you think the world would be back to normal by now? That the global economy would be back on track and growing dynamically again?

But the truth is, we’re still living in a crazy world. All these years later, central bankers are still fighting an epic battle to revive economic growth. They’re still experimenting with radical policies that we’ve never seen in the entire history of the global economy.

You think I’m exaggerating? Well, think again. First-world countries such as Switzerland, Sweden, Germany, Denmark, and Japan now have “negative” interest rates. You know how insane that is? The whole purpose of the banking system is for you to make a profit by loaning money to banks, so they can lend it out to others. But people around the world now have to pay banks to accept their hard-earned savings. The Wall Street Journal wanted to discover when the world last experienced a period of negative yields. So the newspaper called an economic historian. You know what he told them? It’s the first time this has happened in 5,000 years of banking history.

That’s how far we’ve come from living in a normal world: borrowers get paid to borrow, and savers get punished for saving. In this upside-down environment, “safe” investments such as high-quality bonds offer such terrible returns that you wonder if someone’s having a laugh at your expense. I recently learned that the finance arm of Toyota had issued a three-year bond that yields just 0.001%. At that rate, it would take you 69,300 years to double your money!

If you’re struggling to make sense of what all this means for the future of the global economy, join the club. Howard Marks, a legendary investor who oversees nearly $100 billion in assets, recently told me, “If you’re not confused, you don’t understand what’s going on.”

You know we’re living in strange times when even the greatest financial minds admit to being confused. For me, this reality was driven home emphatically last year when I arranged a meeting of my Platinum Partners: an intimate group of friends and clients who gather once a year to gain financial insights from the best of the best.

We had already listened to the opinions of seven self-made billionaires. But now it was time to hear from a man who, for two decades, had wielded more economic power than anyone else alive. I was seated in one of two leather wingback chairs on a stage in a conference room at the Four Seasons hotel in Whistler, British Columbia. Outside the snow was falling gently. The man sitting across from me was none other than Alan Greenspan, former chairman of the US Federal Reserve. Appointed by President Ronald

Reagan in 1987, Greenspan ultimately served as the Fed chief to four presidents before retiring in 2006.

We could hardly have asked for a more experienced insider to cut through the confusion and shed light on the future of the economy. As our two-hour conversation drew to a close, I had one final question for this man who had seen it all, who had guided the US economy through thick and thin for 19 years. “Alan, you’ve had 90 years on this planet and have seen incredible changes in the world economy,” I began. “So, in this world of intense volatility and insane central banking policies around the globe, what is the one thing you would do if you were still the Fed chairman today?”

Greenspan paused for a while. Finally, he leaned forward and said: “Resign!

What are you supposed to do when even an economic icon of Alan Greenspan’s stature is tempted to throw up his hands in dismay, unable to make sense of what’s going on or guess where it will end? If he can’t figure it out, how on earth can you and I predict what will happen?

If you’re feeling stressed and confused, I understand. But let me tell you the good news: there are a few people who do have the answers – a few brilliant financial minds that have figured out how to make money in good times and bad. After spending seven years interviewing these masters of the financial game, I’m going to bring you their answers, their insights, their secrets, so you can understand how to win even in these incredibly uncertain times.

And I’ll tell you this: one of the greatest lessons I’ve learned from these money masters is that you don’t have to predict the future to win this game. Etch that idea into your big, beautiful brain, because it’s important. Really important.

Here’s what you do have to do: you have to focus on what you can control, not on what you can’t. You can’t control where the economy is headed and whether the stock market will soar or plunge. But that doesn’t matter! The winners of the financial game know that they can’t control the future, either. They know their predictions will often be wrong because the world is just too complex and fast changing for anybody to foresee the future. But, as you’ll learn in the pages to come, they focus so intently on what they can control that they’ll thrive no matter what happens to the economy or the financial markets. And with the help of their insights, you’ll thrive too.

Control what you can control. That’s the trick. And this book will show you exactly how to do it. Above all, you’ll finish the book with a strategic plan that provides you the tools to help you win the game.

We all know that we’re not going to become unshakeable through wishful thinking, or by lying to ourselves, or by merely thinking positive, or by putting photos of exotic cars on our “vision boards.” It’s not enough to believe. You need the insights, the tools, the skills, the expertise, and the specific strategies that will empower you to achieve true and lasting prosperity. You need to learn the rules of the financial game, who the players are, what their agendas are, where you can get hurt, and how you can win. This knowledge can set you free.

If you already know a bit about investing, you may be wondering – as one financial journalist asked me recently –“Isn’t it just a simple matter of buying and holding index funds?” Well, Ray Dalio, David Swensen, Warren Buffett and Jack Bogle all told me that indexing is the smartest strategy for regular people like you and me. One reason why is that index funds are designed to match the returns of the market. Unless you’re a superstar like Warren or Ray, you’re better off capturing that market return instead of trying – and almost certainly failing – to beat the market. Even better, index funds charge minuscule fees, saving you a fortune over the long run.

I wish it were that simple, though. As a lifelong student of human behavior, I can tell you this: most people find it really hard to sit tight and stay in the market when everything is going haywire. Buy and hold tends to go out the window. If you have nerves of steel like Buffett or Bogle, that’s great. But if you want to know how the majority of people behave under stress, just check out a study by Dalbar, one of the financial industry’s leading research firms.

Dalbar revealed the gigantic discrepancy between the market’s returns and the returns that people actually achieve. For instance, the S&P 500 returned an average of 10.28% a year from 1985 to 2015. At this rate, your money doubles every seven years. Thanks to the power of compounding, you’d have made a killing just by owning an index fund that tracked the S&P 500 over those 30 years. Let’s say you’d invested $50,000 in 1985. How much would it have been worth by 2015? The answer: $941,613.61. That’s right. Almost a million bucks!

But while the market returned 10.28% per year, Dalbar found that the average investor made only 3.66% a year over those three decades! At that rate, your money doubles only every 20 years. The result? Instead of that million-dollar windfall, you ended up with only $146,996. What explains this massive performance gap? In part, it’s the disastrous effect of excessive management fees, outrageous brokerage commissions, and other hidden costs that we’ll discuss in chapter 3. These expenses are a constant drain on your returns – the equivalent of a merciless vampire sucking your blood each night while you’re asleep.

But there’s another culprit, too: human nature. As you and I know, we’re emotional creatures with a gift for doing crazy stuff under the influence of emotions such as fear and greed. As the legendary Princeton University economist Burton Malkiel told me: “Emotions get ahold of us, and we, as investors, tend to do very stupid things.” For example, “we tend to put money into the market and take it out at exactly the wrong time.” You probably know people who got carried away during a bull market and took reckless risks with money they couldn’t afford to lose. You may also know people who got scared and sold all their stocks in 2008, only to miss out on huge gains when the market rebounded in 2009.

I’ve spent almost four decades teaching the psychology of wealth. So, in the third section of Unshakeable, I’ll show you how to adjust your behavior and avoid common mistakes that are driven by emotion. Why is this so important? Because you can’t apply the winning strategies in this book unless you learn to “silence the enemy within.”

Then, together we’ll answer what may be the most important questions of all. What are you really after? How do you achieve the ultimate level of happiness you desire in your life? Is it really money you’re chasing, or is it the feelings that you think money can create? Many of us believe – or fantasize – that money will bring us to a point where we finally feel free, secure, excited, empowered, alive, and joyful. But the truth is, you can achieve that beautiful state right now, regardless of your level of material wealth. So why wait to be happy?


Legal Disclosure: Tony Robbins is a board member and Chief of Investor Psychology at Creative Planning, Inc., an SEC Registered Investment Advisor (RIA) with wealth managers serving all 50 states. Mr. Robbins receives compensation for serving in this capacity and based on increased business derived by Creative Planning from his services.

Header image © Zacarias Pereira da Mata/shutterstock

Tony Robbins

Tony Robbins is an entrepreneur, bestselling author, philanthropist and the nation’s #1 Life and Business Strategist. Author of five internationally bestselling books, including the recent New York Times #1 best-seller UNSHAKEABLE, Mr. Robbins has empowered more than 50 million people from 100 countries through his audio, video and life training programs. He created the #1 personal and professional development program of all time, and more than 4 million people have attended his live seminars.

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