Unshakeable: Your Financial Freedom Playbook

by Anthony Robbins

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.

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

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

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

every single bear market in US history has been followed by a bull market, without exception.

The stock market is a device for transferring money from the impatient to the patient. —WARREN BUFFETT

But the fact that a market is close to its all-time high doesn’t necessarily mean that there’s trouble ahead. As we discussed earlier, the US market has a general upward bias. It rises over the long term because the economy continues to grow. In fact, the US market hits an all-time high on approximately 5% of all trading days. On average, that’s once a month.

From 1996 through 2015, the S&P 500 returned an average of 8.2% a year. But if you missed out on the top 10 trading days during those 20 years, your returns dwindled to just 4.5% a year. Can you believe it? Your returns would have been cut almost in half just by missing the 10 best trading days in 20 years!

The moral: if you got spooked and sold at the wrong time, you missed out on the fabulous days that followed, which is when patient investors made almost all of their profits.

Jack Bogle puts it perfectly: “Don’t do something—just stand there!”

The worst-performing investor wasn’t the unlucky one, but the one who stayed on the bench, the one in cash: he ended up with only $51,291.

for the rest of us, picking individual stocks is a losing game. There are just too many things we don’t know, too many variables, too much that can go wrong.

Like poker, investing is a zero-sum game: there are only so many chips on the table. When two people trade a stock, one must win and one must lose. If the stock goes up after you buy it, you win. But you’ve got to win by a big enough margin to cover those transaction costs. Wait, it gets worse! If your stock goes up, you’ll also have to pay taxes on your profits when you sell the stock. For investors in an actively managed fund, this combination of hefty transaction costs and taxes is a silent killer, quietly eating away at the fund’s returns! To add value after taxes and fees, the fund manager has to win by a really big margin. And, as you’ll soon see, that ain’t easy.

active manager is likely to keep a portion of the fund’s assets in cash, ready to invest if an enticing opportunity arises—or ready to meet redemption requests if lots of investors decide to sell their shares in the fund. Keeping some cash on hand isn’t a bad idea, and it’s handy when the market falls. But cash doesn’t earn a return, so it will underperform stocks over time, assuming that the market continues its general upward trajectory. Ultimately the resulting “cash drag” tends to have a negative impact on the returns of actively managed funds.

What about index funds? Instead of sitting on cash, they remain almost fully invested at all times.

you work for a smaller company, chances are that you’ll be forced to invest in funds with higher fees.

What you really need to know is whether your advisor is: • a broker, • an independent advisor, or • a dually registered advisor.

If an advisor charges a money management fee for selecting investments, that should be it. End of story. Why should they be able to add another fee for pooling those investments together? I’ll tell you why: because they can. Because you might not notice.

But let me tell you, there’s a huge prize when you reach the finish line of this crazy obstacle course and find a truly great advisor. For many people, nothing has a more positive impact on their financial future than partnering with an intelligent guide who knows the territory and can show them proven ways to win in any environment. A world-class advisor will help you immeasurably from start to finish: defining your goals, keeping you on a steady path toward them—in particular, by helping you to weather market volatility—and massively increasing the probability that you’ll actually achieve those goals.

You’ve learned the power of becoming a long-term investor who doesn’t trade in and out of the market, who stays the course without getting shaken and stirred by corrections or crashes. • You’ve learned that the vast majority of actively managed mutual funds overcharge for underperformance, which is why you’re so much better off with inexpensive index funds that you can hold for many years. • You’ve learned that excessive fees have a devastating effect, like termites eating away at the foundations of your financial future. • And you’ve learned how to find an independent advisor who truly deserves—and will richly repay—your trust.

One way to achieve asymmetric risk/reward is to invest in undervalued assets during times of mass pessimism and gloom.

“Anyone may arrange his affairs so that his taxes shall be as low as possible. . . . Nobody owes any public duty to pay more than the law demands.”

You’ll even learn to welcome bear markets because of the unparalleled opportunities they create for coolheaded bargain hunters.

None of us knows when a bear market will come, how bad it will be, or how long it will last.

Historically, the stock market has returned an average of 9% to 10% a year over more than a century. But these figures are deceptive because stocks can be wildly volatile along the way. It’s not unusual for the market to fall 20% to 50% every few years. On average, the market is down about one in every four years.

Historically, stocks, bonds, energy commodities, and real estate have outperformed gold. So count me out.

As I see it, hedge funds are handmade for suckers or for speculators looking to roll the dice on a big bet. They’ll make someone rich, but it ain’t likely to be you or me.

Explore. The core of our clients’ portfolios is invested in index funds that simply match the market’s return. But at the margins, it can make sense to explore additional strategies that offer a reasonable chance of outperformance. For example, a wealthy investor might add a high-risk, high-return investment in a private equity fund.

“If you can’t add value, if you can’t create an asymmetry, then the best thing you can do is minimize your costs,” says Howard. In other words, “Just invest in an index.”

The best way to win the game of investing is to achieve sustainable long-term returns. But it’s enormously tempting to swing for home runs, especially when you think other people are getting rich faster than you!

man is but the product of his thoughts. What he thinks, he becomes.

But in reality, the mental and emotional state in which you live is ultimately the result of where you choose to focus your thoughts.

Whenever we believe in the illusion of loss, we suffer.

Either you master your mind or it masters you. The secret of living an extraordinary life is to take control of the mind, since this alone will determine whether you live in a suffering state or a beautiful state.

What I’ve come to realize is that the single most important decision in life is this: Are you committed to being happy, no matter what happens to you? To put this another way, will you commit to enjoying life not only when everything goes your way but also when everything goes against you, when injustice happens, when someone screws you over, when you lose something or someone you love, or when nobody seems to understand or appreciate you? Unless we make this definitive decision to stop suffering and live in a beautiful state, our survival minds will create suffering whenever our desires, expectations, or preferences are not met. What a waste of so much of our lives!

If you want to take the island, you have to burn the boats. You have to decide that you’re 100% responsible for your state of mind and for your experience of this life.

“I’m done with suffering. I’m going to live every day to the fullest and find juice in every moment, including the ones I don’t like, BECAUSE LIFE IS JUST TOO SHORT TO SUFFER.”

As soon as I feel the tension rising in my body, I catch myself. And the way that I catch myself is really simple: I gently breathe and slow things down. I step out of the situation and start to distance myself from all those stressful thoughts that my brain is generating. It’s natural for these thoughts to arise, but they’re just thoughts. When you slow down, you realize that you don’t have to believe these thoughts or identify with them.

the problem isn’t the existence of our negative, destructive, and limiting thoughts—everyone has those! What hurts us is the habit of believing those thoughts.

It doesn’t matter what you appreciate. What matters is that by shifting your focus to appreciation, you slow down your survival mechanism. Love, joy, and giving, will all trigger the same positive transformation. This shift in your focus creates space for your spirit to enter the game, so you don’t get stuck inside your head. If you keep doing this with real consistency, you actually rewire your nervous system, training your mind to find the good in every situation, so your experience of life is one of thankfulness and joy.

Before you know it, you feel free. You let go and start to laugh at things that used to drive you nuts. This makes for a happier life and healthier relationships, while also helping you to think more clearly and make smarter decisions.

you’re much more present for other people when you’re not caught up in your own thoughts of loss, less, and never. When you’re in a beautiful state, you can give so much more to everyone you love.

you can’t be grateful and angry at the same time. You can’t be grateful and fearful at the same time. If you want a miserable life, there’s no better way to achieve it than to focus your mind on anger and fear! But if you want a happy life, if you want to live in a beautiful state, nothing works better than to focus on gratitude!

Step 4. As you breathe into your heart, feeling deep gratitude for your heart, I want you to physically feel your heartbeat. And as you’re doing this, I want you to think of three experiences in your life for which you feel incredibly grateful—and you’re going to step into those three experiences one at a time. They could be big or small. They could date back to your childhood, or they

you and I have the power to vault ourselves out of a suffering state and into a beautiful state in just two minutes. How? By focusing on what we appreciate.

Take all of your negative thoughts and all of your negative emotions, trade them for appreciation, and your whole life changes in an instant.

If you’re ready to burn the boats and take the island, I recommend that you write a note explaining your decision to live in a beautiful state and why you’ve made it. Then send this note to three people you respect and ask them to tell you (gently!) if they ever see you slipping into a suffering state.

Who is going to make medical decisions about your care should this happen?

Setting Up a Will. Drafting a will is the first step in any estate planning, and there are four key decisions you must make.