Title: Unshakeable
Author: Tony Robbins with Peter Mallouk
Date read: 2019 Nov
Notes written on: 2019 Nov 25th
WHY I CHOOSE THIS BOOK:
First it’s about financial education, which I’m working on growing my knowledge. Then it’s a funny story. I went into a book store looking for theatre activities book. Not finding anything. I kept looking around at the self help section. And this one along with 2 others found my attention. I picked it up and bought it.
BOOK THEME/ MESSAGE:
How to become financial free. It’s a How to book with mindset included in it. Financial education basics.
PERSONAL CONNECTION TO FINANCIAL EDUCATION:
I wanted to improve my finances. It wasn’t out of the blue. And here I am writing notes about it.
HOW DOES THE BOOK RELATE TO ME TO ME OR MY EXPERIENCES?
INCLUDING MY HIGHLIGHTS PASSAGES AND OR QUOTE.
The last 4 years have been a growth journey. And this is one more step into this journey. I am working on improving my business/ work aspect of life, on improving myself. And my finances. Most of you read this, and myself included use money daily. Yet we know little about what it is and what it’s capable of doing for us. Financial education has been on my radar for the last few years. Plus the more I know the more I want to know.
HIGHLIGHTS:
Passages below are all taken from the book
The unshakeable playbook:
THE CORE FOUR
The key principles that help you guide every investment decision you make
…there are four major principles that nearly all great investors use to guide them in making investment decisions.
QUOTE But it’s not enough to know a principle. You have to practice it. Execution is everything.
Core principle 1- Don’t lose
The first question that every great investor asks constantly is this: ” how can I avoid losing money?” … the more money you lose, the harder it is to get back where you started.
Rule number one: never lose money. Rule number two: never forget about rue number one.
Warren Buffet
It simply means that we should invest in ways that help to protect from nasty surprises.
Core principle 2- Asymmetric risk/reward
A fancy way of saying that the rewards should vastly outweigh the risks … how to reduce risks while maximising returns.
Core principle 3- Tax efficiency
They know that it’s not what they earn that counts. It’s what they keep. That’s real money, which they can spend, reinvest or give away to improve the lives of others.
Core principle 4- Diversification
Across different asset classes
Within asset classes
Across markets, countries, and currencies around the world
Across time
If you want to be certain that you’ll never lose money in the financial markets, you can keep your savings in cash-but than you’ll never stand a chance of achieving financial freedom. As Warren Buffet says, “We pay a high price for certainty.”
If you live in fear, you’ve lost the game before it even begins. How can you achieve anything if you’re too scared to take a risk?
You can never know what the stock market will do. But that uncertainty isn’t an excuse for inaction.
As Warren Buffet says,
Risk comes from not knowing what you’re doing.
In fact, while others live in terror of bear markets, you’ll discover in this chapter that they are the single greatest opportunity for building wealth in your lifetime. Why? Because that’s when everything goes on sale!
A Customized Approach to Asset Allocation
In reality, the type of assets you own should be matched to what you personally need to accomplish.
What asset classes will give you the highest probability of getting from where you are today to where you need to be?
CORE and EXPLORE
…few key guidelines to keep in mind when you’re constructing (or reconstructing) your portfolio.
1- Asset allocation drives returns. … The moral: never bet your future on one country or one asset class.
2- Use index funds for the core of your portfolio
3- Always have a cushion
4- The rule of seven. Ideally, we like our clients to have seven years of income set aside in income-producing investments such as bonds and MLPs. … The lesson: never underestimate the awesome power of disciplined saving combined with long-term compounding.
5- Explore … additional strategies that offer a reasonable chance of outperformance.
6- Rebalance. Imagine you start with 60% in stocks and 40% in bonds; then the stock market plunges, so you find yourself with 45% in stocks and 55% in bonds. You’d rebalance by selling bonds and buying stocks. … One benefit of rebalancing, says Malkiel, is that it “make you do the opposite;” forcing you to buy assets when they’re out of favor and undervalued. You’ll profit richly when they recover.
The psychology of wealth
80% psychology, 20% mechanics
Mistake 1: Seeking confirmation of your beliefs, Why the best investors welcome opinions that contradict their own
The Solution: Ask better questions and find qualified people who disagree with you.
Mistake 2: Mistaking recent events for ongoing trends, Why most investors buy the wrong things at exactly the wrong moment.
The Solution: Don’t sell out. Rebalance.
Mistake 3: Overconfidence, Get real: Overestimating our abilities and our knowledge is a recipe for disaster!
The Solution: Get real, get honest.
Mistake 4: Greed, gambling, and the quest for home runs, It’s tempting to swing for the fences, but victory goes to steady survivors
The Solution: It’s a marathon, not a sprint.
Mistake 5: Staying home, it’s a big world out there – So how come most investors stay so close to home?
The Solution: Expand your horizons
Mistake 6: Negativity and loss aversion, Your brain wants to be fearful in time of turmoil – Don’t listen to it!
The Solution: Preparation is key
An Extraordinary quality of life
It’s about living a magnificent life on your own terms.
The science of achievement
The first step to achieving anything you want is focus. Remember: wherever your focus goes, your energy flows.
The second step is to go beyond hunger, drive and desire, and to consistently take massive action
The third step to achieving whatever we want is grace. Some people call it luck…
The art of fulfilment
…the art of fulfilment is an even more important skill to master. Why? Because if you master the external world without mastering the internal world, how can you be truly and sustainably happy?
The first principle: You must keep growing
The second principle: You have to give. … We’re driven by our desire to contribute. If we stop feeling that deep sense of contribution, we can never feel truly fulfilled.
In fact, I truly believe that success without fulfilment is the ultimate failure.
… in reality, the mental and emotional state in which you live is ultimately the result of where you choose to focus your thoughts.
Either you master your mind or it masters you. The secret of living and extraordinary life is to take control of the mind, since this alone will determine whether you live in a suffering state of 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?
Your checklist for success:
Fortifying your kingdom – How to protect your assets, build your legacy, and insure against the unknown – with Peter Mallouk
{Tara writing here – I’ve shorten this list to make it brief. Make sure you speak to someone who is qualified to go through these, Also this is written by Americans, find the equivalent in your country. – Tara done}
Checklist 1: I Got The Power
⚪Durable power of attorney for health care (health care proxy)
⚪Durable power of attorney for finances
⚪A living will (also known as a declaration, a directive to physicians, or a health care directive)
Checklist 2: Estate Planning
⚪Setting up a will
⚪Trusts
⚪Estate tax planning
⚪Revocable living trust
Checklist 3: Insurance
⚪Life insurance
Disability insurance
⚪Long-term care insurance: covering the cost of assisted living
⚪Homeowner’s insurance
⚪Umbrella insurance
Checklist 4: Leaving a legacy
⚪Leave the right assets to charity
⚪Work with a donor-advised fund
⚪Establish a private foundation
⚪Look for creative ways to increase your impact
Ideas are a dime a dozen, and the implementation is everything.
Jack Bogle
WHAT IMPACT OR IMPRESSION HAS THIS BOOK MADE ON ME?
Financial education is something that most people don’t learn unless it’s part of their job or their family teaches them. And at the same time, it’s a core aspect of everyone’s life.
HOW CAN I USE THIS?
Looking at what I spend now. How I want to be living. And doing the plan to get from now to then.
WHY MUST I USE THIS?
To know how much money I really want to be making so that I don’t chase after a loose end.
WHEN WILL I USE THIS?
When planning my 2020 year coming up
My recommendation for this book: [low 1 … 10 high] 10/10
Why
Financial education in something I know to be crucial to be financial free. And to create a life on your terms. It’s therefore something I want others to know about. So that they may have more control of their life. To create the life that makes them feel their best selves.
Have a look at unshakeable.com for more information about the book.
Happy reading
