5 Passive Income Tips from Unshakeable by Tony Robbins
According to the book, Unshakeable by Tony Robbins,
developing your own passive income is an excellent idea if you believe in
financial independence. Not only does it give you freedom of time, but it also
reduces your stress, anxiety, and fear of the future.
In his book, Tony Robbins illustrates how investing a couple
hundred dollars a month is all it takes to become a millionaire. This lifestyle
empowers you to do the things you love rather than what pays the bills.
See the list below.
For the Unshakeable by Tony Robbins video book review, I
selected the five best tips that were found in the book. Also, there is a bonus
tip (#6) that I am going to share only on this blog. These passive income tips
are:
- The best time to invest is during a crash.
- The safest and securest investment you can make is on index funds.
- You don’t need a lot of money to be wealthy; you need time.
- Your financial broker will make you broker.
- Don’t invest emotionally into your financial investments.
- The secret to living an extraordinary life is to master your psychology.
I remember my grandma’s firsthand experience about the time
when she received a massive retirement bonus from her job, upwards of a quarter
million dollars. And this was back in 1995, so you know that money was worth a
lot more than it is now. She was thrilled. And then she became convinced to
invest that money in stocks. So, she did. All of it. Every single penny was
given to a company to invest in stocks. And guess what? Like a magic trick from
your favorite magician, before you know it, that money went poof, it
disappeared without a trace.
Needless to say, she was devastated. But the good
news is this book will help many avoid making similar mistakes and hopefully,
this Article will too. Bear markets occur every three to five years. And when
that happens, the market declines on average about 30% to 40%. During this
time, we panic, pessimism rises, and we begin to fear that the market won’t
ever recover. But outside of all the doom and gloom, there are a few who see
this crash as a time for us to invest more money at lesser costs.
These brilliant
minds know that the crash is one of the greatest opportunities in our lifetime to
move up the ladder. You know why? Because everything goes on sale when the
economy drops. While people and shop owners are caught by surprise, completely
unprepared and then forced to sell their luxury homes, diamond jewelry, and
Lamborghinis at 50% off, you and I are capitalizing on these real estate and
stock investments at incredibly low prices. One of the greatest investors of
the last century said, “the best opportunities come in times of maximum
pessimism.”
Tip #1: The best time to invest is during a crash
Tip number one is “the best time for you to invest is during
a crash.” So, I started to realize that the greatest danger to our financial
health isn’t a market crash; it’s being out of the market. And since you can’t
accurately predict the rise and falls of the market, one of the most
fundamental rules for achieving long-term financial success is that you get in
the market and stay in it for the long run. But that begs the question; which
stock investment should you make? Well, this book recommends a solution that
allows us to make money almost entirely on autopilot. The solution is for you
to buy and hold on to every stock in an index such as the S&P 500. This
includes companies like Apple, Google, Amazon, and Facebook, which (by the way)
are the four companies that are in a race to become the first trillion-dollar company.
Also, an index fund protects investors against high transaction costs and taxes
due to making fewer trades. This is a strategy recommended by Dalio, Swenson,
Warren Buffett, and Jack Bogle.
Tip #2: The safest and securest investment you can make is
on index funds.
Tip number two is “the safest and securest investment you
can make is on index funds.” Now let’s look at a great example from the book.
Imagine that two friends, Joe and Bob, decide to invest $300 a month. Joe gets
started at age 19, keeps going for eight years, and then stops adding to this
pot at age 27. In all, he’s saved a total of $28,800. Joe’s money then
compounds at a rate of 10% a year (which is roughly the rate of return of the US
stock market over the last century). By the time he retires at age 65, how much
does he have? The answer is $1,863,287. His small $28,800 investment has grown
to nearly a two-million-dollar investment. Let’s look at his friend Bob. Bob
gets off to a slower start and begins investing the same exact amount ($300 a
month) at the age 27. He’s a disciplined guy and keeps on investing $300 a
month until he’s 65 – a period of 39 years. His money also compounds at 10% a
year. The result? When he retires at age 65, he’s sitting on a nest egg of
$1,589,733. So, if we step back for a moment, we can see that Bob invested a
total of $140,000, which is almost five times more than the $28,800 that Joe
invested. Yet Joe has ended up with an extra $273,554, even though Joe never
invested a dime after the age of 27! Because Joe started earlier, the compound
interest he earns on his investment brings way more value to his account. The
point of the story is that compound interest is a force that can catapult you
into a life of total financial freedom.
Tip #3: You don’t need a lot of money to be wealthy; you
need time
Tip number three is “you don’t need a lot of money to be
wealthy; you need time.” Today’s winners are almost tomorrow’s losers. Don’t
let that be you. One of the biggest mistakes you can make when getting into
financial investments is relying on a financial broker to manage your
portfolio. First and foremost, they are loyal to their shareholders and the big
money commissions they make by putting you on expensive actively managed funds.
You might end up with additional fees and taxes that will destroy your
possibility of generating a passive income stream. Like the story about my
grandma, these companies are incentivized to create bigger profits for
themselves. This is a zero-sum game that you don’t want to play. Give your
trust to someone qualified who has your best interest in mind. Registered
Investment Advisers, like doctors and lawyers, have a fiduciary duty and a
legal obligation to act in your best interest at all times.
Tip #4: Your financial broker will make you broker
Tip number four is “your financial broker will make you
broker.” The thing is so many adults my age are not investing. According to the
book, about 50% of Millennial distrust the financial markets and keep a great
amount of their savings in cash. If you want to be certain that you’ll never
lose your money in the financial markets, then you can keep your savings in
cash—but then you’ll also never stand a chance of achieving financial freedom through
investing. As Warren Buffet says, “We pay a high price for certainty.” What he
could have added was that we also pay a high price for fear. If you live in
unwarranted fear, you’ve lost the game before it even begins. How can we
achieve anything if we’re too scared to take a risk? You have to focus on what
you can control, not on what you can’t. When you become unshakeable, you have
unwavering confidence, even amidst the storm. You are no longer trapped by
circumstances or by fear of the coming market crash. At the same time, you
don’t want to be too confident. That can lead to making bad decisions such as
relying heavily on one stock (like Apple) or trying to predict market
corrections and fluctuations. Remain clearheaded and use logic over emotions.
Act on the basis of knowledge.
Tip #5: Don’t invest emotionally in your financial
investments
Tip number Five is “Don’t invest emotionally in your
financial investments.” If you know someone who is not a financial genius and
may benefit from any of the five tips in this Article, then please, share this Article.
And of course, if you like the Article, leave a Comment. Here is Bonus Tip from
the Book.
Tip #6: Master your Psychology
Do you know
what the single biggest threat to your financial well-being is? The answer is
your own brain. They’re people who listened to the Unshakeable by Tony Robbins’
audiobook along with having read the book and they still might become victims
to a form of financial self-sabotage.
The thing
is, for a lot of us, losing all our money and everything we own, especially in
one shot, feels a lot like dying. That’s why 80% of success is psychology and
the other 20% is mechanics. So what does this look like in practice?
Well, what
the best investors do is create a list of simple rules to guide them so that
when things get emotional. As a result, they remain on-target in the long term.
It’s important to have your focus on the bigger goal. We can’t control all the
events in our lives, but we can control what those events mean to us.
The purpose
of this Unshakeable by Tony Robbins’ summary is to show you that it’s possible
to create passive income through financial investments – like index stocks.
That's all
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I hope you
enjoyed my post!
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