TLDR; In Money Master the Game, Tony Robbins exposes nine myths about the financial industry to give the reader insider knowledge.
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Note: This article is part of a section-by-section break down of the book Money Master the Game by Tony Robbins. Click here to start at the introduction to this series: The Journey to Financial Freedom.
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In Money Master the Game (affiliate link), Tony Robbins exposes nine myths about the financial industry to give the reader insider knowledge. If you’re going to play in this investment game it’s best to understand the rules, exceptions to the rules, and loopholes. Of all the myths exposed #2 was the most revealing to me: fees matter. It was shocking to see how much a 3% fee can eat away at your investments. It was also revealing to realize I was paying 1.5% in fees when I could get it down to .5% or lower.
Understand these 9 rules
- 96% of mutual funds do worse than low-cost-market-mimicking index funds.
- Fees matter. A 3.17% fee (mutual fund average) can reduce your total investments by half in the long run.
- Brokers do not have your best interest in mind AND they are not legally required to. On the other hand, fiduciaries do and are.
- Most 401(k)s are riddled with fees that take away from your bottom line. Business owners are liable and could be sued for providing their employees with crappy 401(k) management.
- Roth 401(k) exist and can drastically reduce the amount of taxes you pay on your investments
- Target-date funds (TDFs) are usually more expensive, aggressive, and volatile than advertised.
- Some annuities can provide a guaranteed lifetime income while protecting the principal amount.
- There exist investment vehicles that allow people to take part in the upside and be protected from the downside.
- You may be holding yourself back with a limiting story. (more on this later).
Investigate your current situation
Are you paying more fees than you should? Is your 401(k) invested in an overly expensive target-date fund? Tony provides some tools and services in section two of MMG that will help you find the answers to those questions.
Personalfund.com lets you check mutual fund fees and gives you a comparison of similar funds that are cheaper. It’s free to try but eventually, you’ll get hit with a paywall. I suggest running the numbers on your mutual funds and take screenshots of the results. I couldn’t find the length of the trial period on the site but if you do, share it in the comments other readers can benefit from the information.
Real return rate calculator. You can calculate the real rate of return using this calculator to check if you’re getting the returns you think you are. I was shocked at how low (4%) my IRA has returned since I bought into it. Although it showed it was 53% up from where I began. I couldn’t find
Showmethefees.com is a service that audits your 401(k) and lets you know how much you’re paying in fees. In order for them to do so, you’ll have to email them your provider’s fee disclosure form and they’ll analyze it for you. I’m fortunate to be at a company whose 401(k) provider has low fees, but if you’re not you can take the results to HR and try to persuade them to change. Businesses are liable and can be sued if they sponsor
Portfoliocheckup.com is a service that gives you a free comprehensive overview of your portfolio with
Have a breakthrough moment
If we know the rules and have the tools, what else could be stopping us from financial freedom? Ourselves. Our limiting perceptions and beliefs stifle significant progress in our lives. At least that’s the ninth myth that Tony Robbins exposes, “The lies we tell ourselves.”
He suggests that if you really want to have significant success in your life (financial or otherwise) you have to have a breakthrough moment—the moment when you decide that things are going to change for the better.
There are three steps to having a breakthrough moment
- Change your strategy – Make a plan, modeling it from someone who’s done what you want to do. If they can do it so can you.
- Change your story – If you’re telling yourself a limiting story like, “the only people who make money are the ones who already have it,” change it to an empowering story like, “I will not be one of the many who can’t, I will be of the few who do.”
- Change your state – Change your physiology. Use your body to change your attitude and change who you are. The good way to do this, described in the book, is to exercise. A fast way to do this is described in this TED Talk.
Those are the core insights I got out of section two of MMG. If you’re reading and have read the book too, let me know if I’ve missed anything in the comment section below.
Update: I’ve completed summaries for all sections of MONEY Master the Game and wrote a book review. Find the links to it all below.