CHICAGO – Tony Robbins, who launched a self-improvement empire with his once-ubiquitous infomercials, has made fire-walking a staple of his empowerment seminars for decades..
With his latest book, "Money: Master the Game," he turns his attention to financial advice with one overriding goal: keeping average investors from getting burned.
Robbins, 54, has reached more than 50 million people through his motivational tapes and live seminars since publishing his first self-help book, "Unlimited Power," nearly 30 years ago. He has coached such luminaries as former President Bill Clinton and Oprah Winfrey, and has become a larger-than-life persona himself, appearing in the movie "Shallow Hal," and perhaps less flatteringly, as a book-signing cannibal on the television show "Family Guy."
But the infomercials, which Robbins said once ran "every 30 minutes, 24 hours a day," haven't aired in more than a decade, and his circle of influence has quietly expanded to the C-suite, where clients include hedge fund manager Paul Tudor Jones and salesforce.com founder and chief executive Marc Benioff, among others.
Robbins grew up in Southern California in a less-than-privileged environment, which he described as "no-money-for-food-at-Thanksgiving tough." Knowing what it was like to do without has made philanthropy an essential part of his own success. The Great Recession made this book, his first in 20 years.
"When 2008 happened and I saw all these people losing their homes, and all these people losing half their entire retirement, it wasn't a statistic to me," Robbins said. "It really made me upset when I saw that it was really based on manipulation of the market."
Using his connections, Robbins spent four years researching, assembling and interviewing a who's who of financial gurus, looking to find the specific strategies that make and keep the wealthy insulated, in good economic times and bad. The result is a 600-page book featuring the advice of Warren Buffett, Carl Icahn, Vanguard founder John Bogle, and other lesser-known but no less successful investors, with a healthy dose of aphorisms and encouragement from Robbins sprinkled throughout. The title promises "7 simple steps to financial freedom," with endorsements ranging from hedge fund titan Ray Dalio to pop star Usher.
Core strategies include buying index funds instead of actively managed mutual funds, proper asset allocation and minimizing risk.
Robbins, who lives in Palm Beach, Fla., was in Chicago recently to promote his new book. The Tribune sat down with Robbins for an interview. What follows is an edited transcript.
Q: Did Warren Buffett offer any good stock tips?
A: His whole philosophy at this stage is buy the index. When he passes away, 90 percent of his money is going to go straight into the index. That made (Vanguard founder and retired chief executive) John Bogle pretty happy. The scary truth is 96 percent of mutual funds fail to match the market, and the 4 percent that do, they're always changing. Everybody has a different strategy, but everybody agrees that active management does not beat the market.
Q: Isn't buying index funds common-sense advice?
A: Common sense is not too common. There's $13 trillion in actively managed mutual funds. Vanguard has grown to be the largest mutual fund in the world today, but that's where the smart money is and, unfortunately, that's not where most money is.
Q: Who is the book aimed at?
A: The book is designed for a kid just getting out of college, a millennial that has got all this debt and doesn't think they'll ever get out of it. It's designed for a soccer mom saying, "How do I manage my life when I've got five jobs including all my children?" It's for a baby boomer who's behind and wants to turn it around. And the book goes from the most basic to the most advanced – the stuff that Ray Dalio's doing, 99 percent of financial planners won't understand.
Q: Did you find a common thread among these billionaire investors?
A: They know they're going to be wrong, so they have a plan to protect against wrong. The average American thinks they're going to be right based on some talking head. They invest and they have no backup plan. Americans think these guys are giant risk-takers. The truth is they believe in taking as little risk as humanly possible, for the maximum amount of upside. They're looking for that spread of disproportionate risk-reward.
Q: The book says that people's greatest fear is outliving their money. Other than getting very wealthy or working until the end, how can people plan to have money throughout their lives?
A: This is probably the No. 1 conundrum of financial planning today, because people are living longer. The best tool today is longevity insurance – they call it income insurance. Most people know the value of life insurance. But what if you live? So instead of trying to guess one or the other, you plan for those 20 years and you get this income insurance. If you live beyond 85, you have money that's guaranteed for as long as you live in the form of an annuity.
Q: The book is more than 600 pages, and incorporates the advice of dozens of investment gurus. If you had to winnow it down to one sentence, what would it be?
A: The difference between success and failure is not which stock you buy or which piece of real estate you buy, it's asset allocation.
Q: You built your brand through infomercials. Is there a "Money: Master the Game" infomercial in the pipeline?
A: No, I don't do infomercials anymore. There's so much crap on there, which is one reason I probably stopped. In the beginning, I didn't have any other distribution channel.
Q: Why should people take financial advice from Tony Robbins?
A: This book is not my book. I've curated the answers from the very best – people who have made money in good times and bad – and I got access to people nobody did before. The only things that are from me are my opinions around the emotional side of things, because that's been my expertise for 37 years. You can learn all this stuff, but if you don't manage your emotions, you're not going to follow through, you're not going to do any of it.
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