“Wealth consists not in having great possessions, but in having few wants.” — Epictetus
Tony Robbins knows money.
And he knows how to build wealth. And he knows how to create financial freedom.
Tony Robbins doesn’t just share from his own experience. He has the benefit of helping thousands of people master money, master wealth, and build financial freedom.
He also learns from the best of the best and distills it into proven practices for mastering wealth.
In his seminar on Financial Freedom: 3 Steps to Creating and Enjoying the Wealth You Deserve, Tony Robbins shares key insights into how you can master wealth and create your financial freedom.
Start with Psychology
Tony Robbins says that when it comes to building wealth, you need to start with psychology.
He could start with mechanics, but even with the best mechanics, you can still fail. You need the emotional or psychological strength to carry you through, when the mechanics don’t work, or the mechanics get boring, or you run into setbacks.
Tony Robbins says:
“The more you can cultivate that sense of wealth, that sense of abundance in you, the more you can feel that sense of joy, the easier it’s going to be for you to do financially.
Because you’re not going to be in this scared, fearful mode.
Now that’s not enough by itself.
You can have this great sense of abundance and do the wrong mechanics, and be a disaster.”
What Does Wealth Mean to You?
The seminar starts with a very simple question:
“What does wealth mean to you?”
Does wealth mean freedom from ever worrying about money again? Does wealth mean the ability to do things you want to do when you want to do them? Does wealth mean being able to comfortably provide for your family and loved ones, or the power to create a legacy of which you can always be proud?
Wealth vs. Financial Freedom
Tony Robbins makes a distinction between wealth and financial freedom.
He says that wealth is a sense of abundance. It comes from building an attitude of gratitude. Without building a sense of wealth, and a sense of joy, you will never achieve financial independence.
Financial independence is being in that position where you don’t ever have to work again. That if you work, you do it because you really want to.
Tony Robbins warns us that if you get financial independence and you don’t work, you’ll be miserable. He’s seen it time and again from millionaires to billionaires.
Cultivate a Sense of Wealth
Wealth is a state of mind, where you feel a sense of abundance, a sense of joy, and your life is rich.
You need this sense of wealth so that when times get tough, you can still make the right choices, choose the right strategies, and stick with it through the rough patches.
Tony Robbins says:
“You want to have the emotional and psychological strength because that’s going to carry you when the mechanics are boring or frustrating, or when things aren’t working out. Your emotion, your psychology is what will carry you. It will get you to keep doing it.
Whatever shows up, you are larger than anything that can happen to you. You are large than any financial challenge you will ever face.
The true history could guide you to know you can get through this and not let you get overwhelmed by the moment.”
Get Grateful
The key to building wealth is building an attitude of gratitude.
Tony Robbins reminds us how we can build this attitude of gratitude by appreciating all the things in life that we already have:
“Gratitude can put you in that sense of wealth.
It’s your identity, the way you define the wealth, determines whether you are wealthy or not.
Are there enough things for you, knowing that two-thirds of the planet lives on $2 a day, that you could get yourself to really feel grateful?
How much of your life do you get benefits from today that you never had to create?
- The roads you ride on …
- The library, the books you didn’t have to write…
- The Internet that you an access in seconds and get answers to anything
- The people in your life that you didn’t have to raise that are there for you
Think about all the different aspects of your life. If you want to be wealthy all you have to do is associate.”
Money Can’t Buy Fulfillment
Work can bring you fulfillment in ways that money can’t. Tony Robbins has seen a number of people, sell their business, make a lot of money, and then become miserable.
Tony Robbins shares a story of one such friend:
“The vehicle of his business gave him a sense of contribution and he was always growing, figuring out how to solve problems and he had all the people he was connected to in the business, all the employees and friends and associates, and he was significant because he was doing something worthwhile, and he had tremendous certainty because he knew the business, and also variety because it’s always changing.
And now he had this money.”
The Real Secret of Life
The real secret of life is when you work, not because you have to, but because you want to.
Tony Robbins says:
“So the real secret is to be financially free, to be financially independent, you want to get to where you never have to work again, but you do, because you want to.
That’s when life gets very cool.
When you don’t have to work but you want to, you have to work harder.
I enjoy my life today, I don’t have to work, that’s one of the most killer experiences in life.
So I want to tell you I’m not just saying this as some little positive thinking technique, I’m telling you this is the secret, the real secret, to shift it inside you and to add the real value.”
You Already Have It
Be careful not to overlook what you already have and what you can create right under your feet. It’s the classic “If-Then Trap”…If I get a big house, then I’ll be happy… If I make X amount of money, then I’ll be happy, etc.
Tony Robbins says:
“Most people are trying to pursuit something in the future that they already have.
I want you to think of what it is you think you want that will make you wealthy or financially free.
Tell me, what it is you want from financial freedom. How will you know when you’re wealthy? How will you know when you are truly wealthy, how will you know when you are financially free?
Associate to where you get rich.”
3 Levels of Financial Freedom
To define the game of money in a winnable way, Tony Robbins chunks it down into three levels of increasing financial freedom:
- Financial Security
- Housing, cars, food, travel, basic entertainment
- Financial Independence
- You don’t have to work and everything is covered
- Financial Freedom
- You don’t have to work and everything you can think of is covered.
Regarding financial security, Tony Robbins says:
“If you didn’t have to work, if the income from your investments covered those four items (your housing for the rest of your life, your food, your travel, and some entertainment)…how many think that would feel pretty good?
That number is way smaller than what most of you think of when you think of being financially independent, which is everything covered without working.”
Formula for Financial Independence
Tony Robbins provides a simple and timeless formula for financial independence:
- Spend less than you earn and invest the difference
- Reinvest your returns for compounded growth
- Reach a critical mass of investment capital that creates the annual income you want.
On point #1, spending less than you earn and invest the difference, Tony asks, “What do most people do?” Well, they spend more than they earn.
On point #2, reinvesting your returns for compound growth, Tony says that we all know it intellectually, but asks, “Are you emotionally associated?” And he reminds us that earnings alone will never get you financially free. You need compounded growth.
The Game of Money
According to Tony Robbins, the only reason to invest is to have income for life without working. Accelerate to make it happen.
That’s the entire financial game.
Tony Robbins says:
“The Game of Money is, I am building a money machine. And its purpose is to give me income for life, without working.”
How Do You Know You are Playing the Game of Money Well?
Tony Robbins stresses that it’s important to know whether you are on path.
You know by can you answer these three questions:
- Are you spending less than you earn and are you investing it?
- Are you reinvesting and getting compounded growth?
- Are you moving toward that critical mass that will get you free and do you even know what that number is?
Define the Game in a Winnable Way
In order to win the game of money, you have to define it in a winnable way.
First, you have to make sure that you focus on wealth, which is your psychology and emotional strength. You focus on what you are grateful for and what you already have, so that you come from a place of strength and resilience. Don’t create dependencies on other people or circumstances. That takes your power away.
Next, you have to figure out what the numbers are for you in terms of financial security, financial independence, and financial freedom.
Get specific. If it’s not specific, you will never get there.
Tony Robbins says:
“If it’s a general giant number and you keep moving the number, you’ll never get there.
We have to define, this is what it is.
The bottom line:
- In order to achieve what you want where you have a money machine, here is what you must do.
- You must pick out a minimum financial goal for yourself
- You have to pick a specific amount of money that you’re going to invest every single month, every single year
Pay the investments before you pay all the other bills”
3 Buckets of Asset Allocation
According to Tony Robbins, asset allocation is the key to creating and protecting your financial freedom.
Out of the money you have to invest, you create 3 buckets:
- Security bucket
- Growth Investments (growth-driven)
- Dream Bucket
Your Security Bucket
Your first investments have to be in security.
In the security bucket, you put things like cash for 2-6 months, your home, IRA, insurance, fixed income investments. This might be bonds, or whatever, but you need something with less risk. If you screw up, you need your security bucket to get you through.
Tony Robbins suggests putting 40% of your investment money into your security bucket.
Your Growth Bucket
Your growth investment bucket is where you focus on greater return, at the risk of greater loss. According to Tony Robbins, there are two strategies: 1) Buy and Hold, and 2) Momentum.
Buy and hold is the strategy of an owner, and it’s less risky than momentum. Momentum is the strategy of a trader, where you trade money for money, and it’s playing for the short-term. The challenge is prices may have nothing to do with value, and perception can change it.
Your Dream Bucket
Your dream bucket is where you fit all your dreams, big and small. Tony Robbins gives example including traveling around the world, own a condominium in Aspen, a second home, a boat, owning a basketball team, etc.
You want to focus on less risk, more consistent growth… it grows slowly, like grass, but it adds up, and it compounds over time.
How Tony Robbins Invests
Here is how Tony Robbins says to invest:
- Pick your percentage
- Don’t vary when you get a better opportunity
- Don’t take from security bucket
It’s three simple steps, but it’s tried and true.
It goes back to the basics, and this strategy builds on the fundamentals.
Feel Your Way to Abundance
Attract a different experience when it comes to wealth, money and financial freedom in your life.
Tony Robbins says:
“The richer you think and feel, the more abundant you seem to become, because that feeling starts to affect the way you make decisions:
They are not made from fear, they’re made from gratitude.
And when you operate from gratitude, and you’re coming from a generous place within yourself, and other people, it attracts a different experience.”
You are already wealthy.
Can you feel it?
Now use your sense of abundance and use the right strategies to build your financial freedom a smarter way.
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