Unshakeable: Your Financial Freedom Playbook

by Anthony Robbins

never forget about these two ferocious foes of stock market success: fear and fees.

invest in index funds.

Since the end of 2007, mutual fund investors have added almost $1.65 trillion to their holdings of equity index funds while reducing their holdings of actively managed mutual funds by $750 billion. That swing of $2.4 trillion in investor preferences over the last nine years is, I believe, unprecedented in the history of the mutual fund industry.

index funds simply buy and hold all of the stocks in a broad market index such as the S&P 500.

Index funds work by paring the costs of investing to the bare-bones minimum.

They pay no fees to expensive money managers and have min...

Index funds allow you to invest, at minimal cost, in a portfolio diversified to the nth degree.

The gross return of the market minus the cost of investing equals the net return to investors.

This “cost matters hypothesis” is all you need to know to understand the benefits of index investing.

By buying low-cost, broad-market index funds (and holding them “forever”), you can guarantee that you will receive your fair share of whatever returns the financial markets provide over the long term.

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!

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.

any decision made in a state of fear is likely to be wrong.

If you commit to stay with me through the pages of this book, I promise to provide you with the knowledge and tools you need to get the job done. Once you absorb this information and put your plan in place, it will likely take you only an hour or two each year to keep things on target.

This is an area of life that requires commitment. But if you’re committed to understanding and harnessing the insights in this book, the rewards will be incredible. How

And decisions are the ultimate power. Decisions equal destiny.

I was trapped by my circumstances and filled with uncertainty.

People love to say that knowledge is power. But the truth is that knowledge is only potential power. You and I both know that it’s useless if you don’t act on

the Standard & Poor’s (S&P) 500 stock index (a list of the top five hundred companies in the United States)

vast majority of mutual funds are actively managed, which means they’re run by people who attempt to pick the best investments at the best time. Their goal is to “beat the market.”

actively managed mutual fund companies charge fat fees in return for this service.

One study showed that 96% of mutual funds failed to beat the market over a 15-year period.

HEDGE FUNDS VS. MUTUAL FUNDS VS. INDEX FUNDS

a hedge fund is a private fund available only to high-net-worth investors.

A mutual fund is a public fund available to anyone.

An index fund is also a public fund but requires no “active” managers.

“When a person with experience meets a person with money, the person with experience ends up with the money; and the person with money ends up with an experience.”

What most people don’t realize is that investment success is largely a matter of smart “asset allocation”—of knowing precisely how much of your money to put in different asset classes such as stocks, bonds, real estate, gold, and cash.

index funds are designed to match the returns of the market.

Because you can’t win this game unless you have the emotional fortitude to get in it and stay in it for the long term.

The opposite of active management is called passive management, better known as ‘indexing.’ ”

we’re not rewarded when we do the right thing at the wrong time. If you plant in winter, you’ll get nothing but pain, no matter how hard you work. To survive and thrive, you and I have to do the right thing at the right time.

What’s his secret? It’s simple, says Buffett: “My wealth has come from a combination of living in America, some lucky genes, and compound interest.”

our ability to recognize and utilize the power of compounding is the life-changing equivalent of our ancestors’ discovery that they could produce bountiful harvests by planting crops at the right time!

What explains Joe’s incredible success? Simple. By starting earlier, the compound interest he earns on his investment adds more value to his account than he could ever add on his own. By the time he reaches age 53, the compound interest on his account adds over $60,000 per year to his balance. By the time he’s 60, his account is growing by more than $100,000 per year! All without adding another dime. Bob’s total return on the money he invested is 1,032%, whereas Joe’s return is a spectacular 6,370%.

You’re never going to earn your way to financial freedom. The real route to riches is to set aside a portion of your money and invest it, so that it compounds over many years. That’s how you become wealthy while you sleep. That’s how you make money your slave instead of being a slave to money. That’s how you achieve true financial freedom.

you’ve got to save and invest—become an owner, not just a consumer.

Pay yourself first by taking a percentage of your income and having it deducted automatically from your paycheck or bank account. This will build your Freedom Fund: the source of lifetime income that will allow you to never have to work again.

“Where should I put my money?”

Because when we look back at the stock market over an entire century, we discover this extraordinary fact: financial winter comes, on average, every year. Once you start to recognize long-term patterns like this, you can utilize them. Even better, your fear of uncertainty melts away because you see that important aspects of the financial markets are much more predictable than you’d ever realized.

the ability to invest without fear is critically important.

When any market falls by at least 10% from its peak, it’s called a correction—a peculiarly bland and neutral term for an experience that most people relish about as much as dental surgery! When a market falls by at least 20% from its peak, it’s called a bear market. We’ll begin

Freedom Fact 1: On Average, Corrections Have Occurred About Once a Year Since 1900

So we have to remove as much emotion as possible from this game.

Historically, the average correction has lasted only 54 days—less than two months!

But it’s important to note that, in the average correction over the last 100 years, the market has fallen only 13.5%. From 1980 through the end of 2015, the average drop was 14.2%.

Freedom Fact 2: Less Than 20% of All Corrections Turn Into a Bear Market

It turns out that fewer than one in five corrections escalate to the point where they become a bear market. To put it another way, 80% of corrections don’t turn into bear markets.

Freedom Fact 3: Nobody Can Predict Consistently Whether the Market Will Rise or Fall

just remind yourself of this classic remark from the physicist Niels Bohr: “Prediction is very difficult, especially about the future.”