MONEY Master the Game: 7 Simple Steps to Financial Freedom (4 page)

But a few do! A few
do
have great relationships, great joy, great wealth, and endless gratitude. I have studied
the few who do versus the many who talk.
If you want to look for obstacles, what’s
wrong
is always available. But so is what’s
right
! I am a hunter of human excellence. I seek out those individuals who break the norms and demonstrate to all of us what’s really possible. I learn what those few extraordinary individuals do that’s different from everybody else, and then emulate them. I find out what works, and then I clarify it, simplify it, and systematize it in a way to help people move forward.

Ever since the dark days of 2008, when the global financial system nearly melted down, I’ve been obsessed with finding a way to help everyday people take control of their money and fight back against a system that’s often been rigged against them. The fix has been in for years, and it hasn’t gotten a whole lot better with all those so-called reforms on Capitol Hill. In some areas, it’s gotten worse. To find answers, I interviewed 50 of the most brilliant, influential players in the world of money. In this book, you won’t get talking heads, and you won’t get my opinions, either. You’ll hear it straight from the masters of the game: self-made billionaires, Nobel laureates, and financial titans. Here’s just a sampling of a few of the masters of money that you will be learning from in the pages ahead:

• John C. Bogle, the 85-year-old sage with 64 years of stock market history and the founder of the Vanguard Group, the number one mutual fund company in the world;

• Ray Dalio, founder of the largest hedge fund on the planet, with $160 billion in assets;

• David Swensen, one of the greatest institutional investors of all time, who grew Yale University’s endowment from $1 billion to more than $23.9 billion in less than two decades;

• Kyle Bass, a man who turned $30 million in investments into $2 billion in two years during the subprime crisis;

• Carl Icahn, who has outperformed Warren Buffett, the market, and virtually everyone else in the last one-, five-, and ten-year cycles;

• Mary Callahan Erdoes, whom many consider to be the most powerful woman in finance. She oversees more than $2.5 trillion as CEO of J.P. Morgan Asset Management; and

• Charles Schwab, who led a revolution to open up Wall Street to individual investors, and whose iconic company now has $2.38 trillion under management.

I’ll put you in the room with these and many other superstars who get consistent results, decade after decade, in up markets and down, booms and busts. Together we will uncover the core secrets to their investment success and see how to apply them even to the smallest amount of money.

And here is the key: I wrote this book based on timeless wisdom of the most successful investors in the world. After all, none of us knows which way the economy will be headed by the time you’re reading this book. Will there be inflation or deflation? A bull market or a bear?
The idea is to know how to survive and thrive in any market condition. These
real
experts will explain how.
Plus, they’ll be opening their portfolios to show you the mix of investments that they rely on to weather every storm. And they’ll answer this question: If you couldn’t pass on any of your financial wealth to your children, but only a set of principles, what would they be? That could be the greatest inheritance of all, and you don’t have to be one of their kids to get it!

The secret of getting ahead is getting started.

—MARK TWAIN

Get ready, because together we’re about to go on a journey through 7 Simple Steps to financial security, independence and freedom! Whether you’re a millennial just starting out, a baby boomer facing retirement, or a sophisticated investor looking to keep your edge, this book will offer you a practical blueprint for setting and achieving your financial goals and help you break free from whatever limiting behaviors might be holding you back from true abundance. We’ll explore the psychology of wealth, something I’ve studied and taught for nearly four decades. We’ll tackle the money mistakes people make, zeroing in on what keeps them from following through on their best-laid plans. And to make sure you get the results you desire, I’ve gone to the best behavioral economists on earth to find
solutions that really work—small, simple adjustments that automatically trigger you to do what others need discipline to maintain; strategies that can make the difference between retiring comfortably or dying broke.

Let’s face it: so many smart and accomplished people have put aside this area of money because it seems so complicated and overwhelming. One of the first people I gave this manuscript to to review is a brilliant friend named Angela who has accomplished mastery in many areas of her life—but never in the area of money. She told me that people thought she was amazing because she’d sailed 20,000 miles of ocean in some of the roughest seas on small sailboats. But she knew she neglected her finances, and it embarrassed her. “It seemed so confusing, and I couldn’t be competent. I already felt defeated, so I gave up, even though it’s not in my nature.” But she found that by following the 7 Simple Steps in this book, she could finally get control of her finances, and it was easy and painless! “Gosh, I could save for my future just by cutting a few things that don’t give me joy,” she told me. Once she
started thinking about saving, she was able to set up an automatic investment account, and by chapter 2.8, she had already transformed her life.

A few days later, she came in to see me and said, “I got my first-ever brand-new car.”

I asked her, “How did you do it?”

She said, “I began to realize that I was spending more money on my old car for repairs and gas than it cost me to finance a brand-new car!” You should have seen the look on her face when she pulled up in a shiny new pearlescent white Jeep Wrangler.

So I want you to know that this book is not just about how to have a comfortable retirement, but also about how to have the quality of life you desire and deserve today. You can live life on your own terms while you simultaneously lock in your future quality of life as well! The feeling of empowerment and inner strength and certainty that you experience when you master this area of your life will spill into everything else: your career, your health, your emotions, and your relationships! When you lack confidence about money, it unconsciously affects your confidence in other areas too. But when you take charge of your finances, it empowers you and excites you to take on other challenges!

What holds us back from getting started on the road to financial freedom? For a lot of us, like my friend Angela, it’s the feeling that we’re in over our heads. We’ve been taught to think, “This is too complex” or “This is not my field.” Frankly, the system is
designed
to be confusing, so that you’ll give up control to the “professionals” who reap enormous fees by keeping you in the dark. You’re going to learn in the chapters ahead how to prevent that from happening, and, most importantly, I’m going to show you that investing your way to freedom isn’t confusing at all.

One reason people succeed is that they have knowledge other people don’t. You pay your lawyer or your doctor for the knowledge and skills you don’t have. They also have their own special language that can at times keep them insulated from the rest of us.

For example, in the medical world, you might hear that 225,000 people have died “iatrogenic deaths” in the past year. According to the
Journal of the American Medical Association
(
JAMA
), it’s the third largest cause
of death in the United States.
Iatrogenic.
How’s that for a hundred-dollar word? It sounds important, but what does it even mean? Is it a rare tropical disease? A genetic mutation? No,
iatrogenic
actually refers to an inadvertent death caused by a doctor, or a hospital, or an incorrect or unnecessary medical procedure.

Why don’t they just come out and say so? Because it doesn’t serve a medical institution’s interests to put it in plain language a layperson can understand. The financial world has its own jargon too, with special words for things that are really additional fees disguised in language that would make it impossible for you to realize it is taking much more of your money than you would ever imagine.

I hope you’ll let me be your translator as well as your guide on this journey. Together we’ll break the code and cut through the complexity that keeps most of us feeling like outsiders in the world of finance.

Today there is so much information that even the most sophisticated investors can feel overloaded. Especially when we realize what’s being pushed on us often has nothing to do with our needs. Say you’re having some mild chest pains, and you Google the word
heart.
What do you see? It’s not something about the heart attack you might want to deal with right now. Instead, you get Heart, the music group that hasn’t had a hit in 20 years. How does that help you?

My plan is to serve you by becoming your personal financial search engine—a
smart
search engine, one that will filter through all the superfluous, even harmful financial information out there to deliver simple, clear solutions.

Before you know it, you’ll be an insider too. You’ll learn why chasing returns never works, why nobody beats the market long-term,
¹
and why the vast majority of financial experts don’t have a legal responsibility to serve your best interests. Crazy, right? You’ll learn why the returns advertised by mutual funds are not the returns you actually earn. You’ll find solutions that could add literally millions of dollars to your lifetime of investing returns—
statistical studies show that you can save between $150,000 and $450,000 just by reading and applying the principles of section 2 of this book! You’ll be putting money back in your own pocket, not the “fee factories.” You’ll also learn about a proven way of growing your money with 100% principal protection, and tax free to boot (IRS-approved). This vehicle is finally available to individual investors like you.

And here’s what truly sets this book apart: I don’t just tell you about investment strategies that the ultrawealthy have and that you can’t afford or access; I’ve found ways to make them affordable and accessible for you! Why should the privileged few be the only ones to tap into extraordinary opportunities? Isn’t it time that we level the playing field?

Remember,
it’s your money,
and it’s time for you to
take control.

A moment’s insight is sometimes worth a life’s experience.

—OLIVER WENDELL HOLMES, SR.

Before we go on, let me tell you what moved me to write this book. If you’ve watched any of the coverage of my work over the years, or if you’ve read any of my previous books, you probably know my track record for creating massive and measurable change—helping people lose 30 to 300 pounds, turning around relationships that seem to be at their end, helping business owners grow their companies 30% to 130% in a year. I also help people overcome enormous tragedies—from couples who’ve lost a child, to soldiers coming back from Afghanistan with post-traumatic stress disorder.
My passion is helping people create real breakthroughs in their relationships, their emotions, their health, their careers, and their finances.

For nearly four decades, I’ve had the privilege of coaching people from every walk of life, including some of the most powerful men and women on the planet. I’ve worked with presidents of the United States as well as presidents of small businesses. I’ve coached and helped transform the performance of sports stars, from the early days with hockey great Wayne Gretzky to today’s superstar Serena Williams. I’ve had the privilege to work with award-winning actors with the coolness of Leonardo DiCaprio and the warmth of Hugh Jackman. My work has touched the lives and performances of top entertainers from Aerosmith to Green Day, Usher to Pitbull
to LL Cool J. And billionaire business leaders as well, such as the casino magnate Steve Wynn and the internet wizard Marc Benioff. In fact, Marc quit his job at Oracle and began building
Salesforce.com
after attending one of my Unleash the Power Within seminars in 1999. Today it’s a $5 billion enterprise and has been named the “World’s Most Innovative Company” by
Forbes
magazine for the last four consecutive years. So obviously
my clients don’t come to me for motivation. They have plenty of that already.
What they get from me are strategies that help them hit the next level and keep them at the top of their game.

In the financial arena, since 1993 I’ve had the honor to coach Paul Tudor Jones, one of the top ten financial traders in history. Paul predicted the October 1987 Black Monday crash—still the largest single-day US stock market decline (by percentage) ever. While markets plummeted around the world and everyone else was losing his shirt, Paul as much as doubled his investors’ money in 1987. He did it again in 2008, bringing his investors nearly a 30% positive return while the market plummeted 50%! My job working with Paul is to capture the principles that guide all his decisions. Then I put them into a system that he uses daily and, most importantly, at critical times. I’m not a positive-thinking coach. Quite the opposite: I’m a prepare-for-anything coach. I’ve been in touch with Paul, tracking his trading every day through a roller coaster of market conditions. From the tech bubble of the late 1990s to 9/11. From the growth in real estate and the collapse of the subprime market to the financial meltdown of 2008. I’ve been there during the subsequent European debt crisis as well as the largest one-day percentage crash in gold prices in three decades in 2013.