1-sentence-summary: Money: Mastering the Game contains 7 easy steps to financial freedom, based on advice from the world’s best billionaire investors, interviewed by Tony Robbins.
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This book was given to me as a Christmas present in 2014, right next to it I will teach you how to be rich. Tony Robbins didn’t think he’d write another book after publishing Awakening the Giant Within in 1991. And for more than 20 years, she didn’t.
but he was heartbroken by the loss and suffering that resulted from the 2008 financial crisis and he knew he had to use his gift, his access to the top 1% of people in the financial industry, to help people better manage your finances. .
after 4 years of research and interviews, he distilled the best information he could find into nearly 700 pages of paper. the result? Money: Master the game, a New York Times bestseller that sold 1 million copies in its first year.
These are the 3 most important things to remember to get started:
- Never underestimate the exponential power of compound interest.
- Choose one of five financial goals to demonstrate that financial freedom is within your reach.
- Diversify your investments using a system of 3 cubes.
Are you ready to receive the financial education that nobody gave you in school? let’s roll!
money: dominate the game summary
lesson 1: never underestimate the exponential power of compound interest.
If you’ve read more summaries here from the personal finance category, you might think I’m preaching to the choir, but people don’t really get this.
It is because exponential growth is so great that it is difficult for the human mind to comprehend. The best way to be amazed is to look at examples of this, like the story of folding paper to the moon or how an early 10-year investment is worth more than a late 35-year investment.
This book is another great example of this.
When benjamin franklin died in 1790, he left $1,000 for the cities of boston and philadelphia, but only after investing it and not touching it for 100 years. then they were able to remove a part and had to let it sit for another 100 years.
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after 100 years, philadelphia set aside $500,000 to build the franklin institute, a museum. the ending balance of the bank account in 1990, another 100 years later, was $2 million.
boston did an even better job on the investment and turned $1000 into a glorious $4.5 million.
crazy?
yes! so please never underestimate the power of compound interest.
lesson 2: show that you can achieve financial freedom by choosing one of five goals.
If I asked you what is the perfect amount of money you can earn, 9 out of 10 of you would answer: a million dollars.
why a million dollars?
This figure attracts us like flies to the light. but it’s just an arbitrary number.
here’s one that’s much more important: $51,000.
why?
because it is the average annual expenditure of an American adult.
If you can earn $51,000 from investments, you never have to work again. that’s all you need. a million is 20 times more.
doesn’t that make you feel comfortable?
This makes it much easier to reach your financial goals.
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How far you want to go is up to you, and setting specific goals will help you be realistic about what you can achieve in what time frame.
these are 3 of the goals that tony suggests:
- earn enough money from investments to pay basic living costs: rent, food, utilities, a possible mortgage, and transportation.
- earn enough money from investments to pay costs basics of life plus fun, like traveling, going to the movies, buying new clothes regularly, etc.
- earning enough money from investments to be financially independent and never have to work again, i.e. $51,000 per year.
for number 3, you need to invest $640,000 to earn an annual return of 8%, which is only slightly more than the average return of the stock market in any given year.
You may never earn a million dollars in your lifetime, but you will still reach a point where you never have to work again.
lesson 3: use tony’s 3 cube system to diversify your investments.
This is a very easy way to allocate all of your investment money (10% of your income is a good chunk and will get you pretty far, pretty fast, without hurting your spending too much).
tony suggests having 3 cubes.
- a safety bucket.
- a growth bucket.
- a reverie.
The security deposit contains safe investments, such as bonds, that won’t yield much, but are very unlikely to lose you money.
The growth segment is for riskier investments, like stocks, which often outperform average long-term returns, but are very volatile in the short term and can take time to pay off.
The dream cube gets part of the profits you make from the other two cubes, for example 10% of the value of your portfolio at the end of each year.
Making a lot of money only makes sense when you actually use the money to live the life you want, so without a dream cube, what good are the other two?
money: dominate the game review
I’ll Teach You To Be Rich is for people who aren’t ready to start saving but still want to start investing. Rich Dad Poor Dad is for those who have already saved but haven’t started investing. money: mastering the game is both for those who are already saving, already investing, but they may not see the benefits they expected.
There is something to learn from this book for everyone from first graders to portfolio managers. you can read it from cover to cover or just choose the sections that are relevant to you. You’ll learn the exact portfolio allocations of some of the world’s biggest investors, such as Ray Dalio and David Swensen. interviews with the 12 greatest investors of our time are worth 10 times the price of the book. get a copy!
Who would you recommend the summary of the money master game to?
the 9-year-old girl, who just got her first assignment and has just started learning about the concept of money, the 20-year-old girl, who still has the opportunity to start early and reap big rewards 10 years later, and anyone who still lives paycheck to paycheck.
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