tell me the idea of being unshakeable
it’s clearly more than money
but in this context what does it truly
mean to be unshakable it’s a state of
mind it relates to money because most
people when they’re trying to figure out
how to create financial freedom create
more stress for themselves worrying
about what’s going on and when you’re
truly unshakable you have the mindset
where you understand how the market
works you understand that real estate
can go up or down stocks can go up or
down but your family can still do well
unshakable is a bear market can come a
correction can come and there’s no fear
in you or if there is a little fear
we’re all human you don’t stay there you
find a way to break through you find
your Center and when you have that
Center you do what’s right to be able to
take care of yourself and your family so
we live in a world right now where most
people don’t even believe they can
achieve financial freedom anymore
because there’s so much volatility I
mean think about it we have negative
interest rates and 5,000 years richard
banking we’ve never in our history had a
place where i gave you my money and i
paid you to hang on to it i give you my
money to a bank you pay me for interest
i make money off of it and then they
loan it to someone else we’re living in
times that are crazy toyota right now
has a bond that they’re selling for
0.001 that’s your return for giving the
money it’ll take you 69 thousand years
to double your money i’m this has never
happened in history and i was
interviewing about a year and a half ago
you know the former Fed chair alan
greenspan who for 19 years the most
powerful man in finance in the world
under 4 different presidents spent five
hours with him about three privately and
two on stage in front of a group and one
of my final questions to him when we
talked about all this crazy change and
all this volatility and how do people
get things together i said look if you
were back head of the Fed today what
would you do and there was this long
pause he paused he pause and they lean
to me said Tony I’d resign that did not
build much confidence in me or anybody
else who’d be watching and yet in the
midst of all that as you well know
there’s a few unicorns in the financial
market very few these people that have
found a way to do well over all the
decades in good times and in bad and
they know what it takes to be unshakable
and it isn’t just guts or confidence
it’s understanding certain facts that
when you know them they for you the
metaphor I give people is that you know
if you go yeah most of us have heard the
old Sufi metaphor ever you know the man
is walking along in the middle of the
night and he sees a snake and freaks out
runs away and he comes in in the morning
and what does he see it was a rope and
so once you know it’s a rope you know
you can be there in the middle of the
night you’re not scared again this book
unshakable is this it’s really a
financial freedom playbook for anybody
it’s the real essentials about how to go
from where you are to where you really
want to be but how to do it with peace
of mind how to do it even when things
are volatile and enjoy yourself and I’m
really proud that we’re also donating a
hundred percent of the profits as we did
with money master the game to feed
another 50 million people we’re gonna
feed I’ve said to a million people in
the last two years with feeding
America’s my partner I’m gonna feed a
billion people and this is part of that
so this book is something that can
change somebody’s life and while you’re
doing it really take care of other
people that are in need we got 45
million people in this country they
don’t know where their next meals coming
from 17 million or children while you’re
changing your own life we want to make a
difference for them – you mentioned
money master the game you wrote that
book two years ago and in the two years
since it sold over a million copies
incredibly impressive
so why another book now why why did you
write unshakable well I’m really proud
of money mask of the game and I hope
people still pick it up and read it but
it is six hundred and seventy pages you
know what I did as I said I saw what
happened 2008 and I said this can’t be I
have the good fortune of having coached
Paul Tudor Jones one of the top ten
financial traders in the history of the
world for the last twenty four years and
he hasn’t lost money in those twenty
four years that I worked with him so as
a result of that I’ve learned a lot as
you might imagine he’s literally emails
me each day we measured these elements
for two and a half decades but at the
same time when 2008 half and I saw
people losing their homes I saw people
losing half their net worth overnight
and I knew what was the trigger because
I was working with Paul so I thought
what if I wrote a book where I
interviewed the smartest financial
people in the world the people you and I
both have the privilege to interact with
now and I interviewed 50 of them not
people from the lucky sperm Club but
people who literally started with
nothing and built
in that scope and they did it to
investing and what I learned were the
strategies that could change anybody’s
life so I put that in the book in and I
was gratified that it became number one
New York Times bestseller and she said
sold a million copies and hardback but
in addition to that what was really cool
was people’s lives were changed by that
book cuz it wasn’t me it was the best
investors in the world sharing it with
you and so I don’t like writing books I
you know rather pull out my teeth quite
Frank Cody and I hadn’t written a book
for 20 years and Steve Forbes said it
was you know if there was a Pulitzer
Prize for an investment book this one
would win hands down so I wrote this
great book so answer your question why
another one because in the last year and
a half these crazy changes were talking
about with feds all the world are
happening volatility has increased no
one is clear where the world is going I
was talking to Howard Marks of oaktree
capital and he wrote he manages a
hundred billion dollars and he said to
me so Tony you know if you’re not
confused you don’t know what’s going on
it’s if that’s the world that we’re in
so I thought I want to do three things
with this book I want to write a short
book I want to find a book that you can
hold in your hand that lift weights with
it and that you could read in a weekend
or you know a long day if you’re really
committed to and give you all the
essentials that can change your life but
the second reason I wrote it besides a
short book that anybody can get through
and use is I really wanted to write a
book where we could dispel the fear
where we could take that you know snake
and turn it into the rope that it really
is so that you can begin to understand
that there’s no reason to fear these
things and you can participate in this
tremendous opportunity the market for
people to grow and even take advantage
of the worst times because I know you
know that the greatest time for someone
to leapfrog from financial survival to
financial freedom is during the toughest
times things burn down faster than they
grow the opportunities are extraordinary
at that time and we’re going to talk
about that and our next podcast to give
people some real specifics but it is
your opportunity to really leapfrog from
where you are to where you want to be
and you want to be prepared so you don’t
get hurt and you want to take advantage
because that’s where the greatest
opportunities are you know you you
listening to somebody like Warren
Buffett I had the privilege of
interviewing and his whole approach is I
want to be absent to take advantage I
want to be in a position when everyone
else is afraid I want to be greedy
whenever there’s a greedy I want to be
fraid and so this book really showed you
that and then the third and final reason
I wrote this is the financial industry
is that is made up of good human beings
very talented beings but this incentives
in that system are not to take care of
you as the investor these are
corporations they’re multi-billion
almost some of them approaching a
trillion dollars over decades of revenue
that they’re generating and their number
one focus is to take care of their
shareholders well the way you do that is
more fees and the fees are so hidden
that most people know the Obama
administration this last year at least
on the fall one case I try to pass some
rules that look like they may just get
ejected now under the Trump
administration but it’s because 17
billion dollars and fees are being taken
from people you know 1% in fees just 1%
more than you need to pay because of
compounding will cost you 10 years of
income in retirement it could be the
difference between retiring broke having
money for a few years or having for as
long as you live so I really want to
take care of people and protect people
and so those three things write a short
book you can absorb right now that
anyone can use whether you’re a
millennial just getting started and
you’ve all this debt and think you’ll
never get free or whether your baby
boomers think you started too late
here’s the financial playbook to really
get you where you want to go so Tony
folks here listening the podcast can’t
hear this but sitting alongside us here
is Peter Luke talk a little bit about
how the two of you connected and how
Peter came to be the co-author with you
of unshakable well first of all I have
unbelievable spec for Peters we’re
partners and has become a dear dear
friend of mine but it’s kind of
interesting I wrote money master the
game I dug in and pulled out all of the
abuses that I thought had happened in
the system you know we went out and kind
of freed people from this and they’re
able to put ten years sometimes 20 years
of them come back in their pocket but
then I got a call from Peter and I had
actually been really focused on what’s
called the fiduciary stand it’s a big
word but what it really means is most
financial people that you go to most
people that you consider to be a
financial consultant or a supporter or
whoever you want to call them they’re
brokers ninety percent are brokers
nothing wrong with a broker but a broker
does not have to put your needs ahead of
their own it’s crazy all they got to do
is give me an investment that’s called
suitable which means they think it’ll
work for you that’s
but there’s less than 10% of the 300,000
people in the financial industry
the ones that aren’t brokers least
independent registered investment
advisors are called fiduciaries they are
responsible to legally put your needs
ahead of their own if you may say by
Apple this morning and they buy it
themselves for themselves this afternoon
and they get a better deal but while
requires they give you their stock
that’s how strong the laws are but it’s
a real small subset of groups so I was
promoting fiduciaries and I even
recommended a series of like ten
different firms and Peter’s firm was one
of those because his firm and Peter
himself as you said earlier he’s the
only firm and he’s the only individual
financial adviser to be named by
Barron’s three years in a row as the
number one financial advisor in the
country so his track record was
extraordinary so when he called me up
and said Tony I know you care so much
about people you’re trying to protect
them but there’s some dead bodies you
need to see out there there’s there’s
ways of manipulating the system even
four people are called in some
fiduciaries and he flew out on a weekend
I was doing a seminar he never leaves in
the weekend with his family I really
respect him for that but it was the only
time we could meet travel though that
way we sat down and he dropped this set
of insights on me and I was devastated
quite frankly I was angry I was pissed
off I mean like how could people do this
take advantage of people and also
because I’m trying to steer people in
the right way and I found some of these
individuals these organizations who I
really like in order to try to survive
and make enough money they’ve adapted
some interesting approaches that we’re
gonna talk about here but Peters want to
free that and when I sat there at the
end of it I was like Peter I said you
know what you’re doing here you he’s
created a home office for people you
know you know billionaires have home
offices they have a dozen people seven
eight nine people whose entire focus is
every aspect they’re not just what’s
putting together a portfolio they
looking at protect your wrist they look
at your taxes they look at estate
planning look at everything to take care
of you and you know usually got to be a
billionaire to do that he started doing
that for millionaires you know for her
small businesses which is the backbone
of this country and I said to him I said
what if we partnered but I said if we
partnered I would love to join your
board I would love to you know step in
and really help you understand by being
maybe the chief investor psychology how
investors think so we meet there
this needs even more so but he’s already
managing now twenty two billion dollars
you’re number one I said but would you
be willing to do this for people with a
little as a hundred thousand dollars so
that the average person just beginning
the journey someone who’s early in the
journey could still does there have to
be a millionaire a billionaire to do it
and he went back talked to his team and
came back and said we can set up another
division and do this so we became
partners and so now I’m I’m partner with
him in this in the firm I’m on the board
directors partners in writing the book
and I just want to get this message out
and Peter’s one of the smartest guys and
he’s the guy that navigated 2008 to 2009
during that time the Big Bear and you
know one of the greatest economic
challenges in our history and we’ll talk
a little bit later about how well they
did quite extraordinary
Peter I think a lot of people would be
reluctant to reach out to Tony Robinson
say hey Tony I love the book but I got
to tell you there’s some things you need
to know talk a little bit about what
prompted you to to reach out to Tony
well I read the book I mean a lot of my
clients had read the book they come in
with the book in their hand and they say
talk to me about are you a fiduciary
Knoll and I loved it because most of it
spoke directly to what we were already
doing and I could tell from reading it
that he had really tried to navigate all
of this that somewhere along the way he
got pissed off about something I found
out later it was his 401 k plan and he
decided he was just gonna figure it out
and this book was an incredible attempt
at that abhi he’s interviewing these 50
50 I’ve never seen I don’t think it has
ever been done where you have that many
successful people at investing with
different points of views but very
common thread through most of them and
he’s bringing all those ideas but he had
a couple things that really stood out
that were the same thing we talk about
creative planning you should have a
fiduciary you should be sensitive to
fees you should be sensitive to
conflicts don’t try to market time don’t
waste your time trading stocks all day
in your pajamas at home these are the
core message really matched up with us
so I thought hey I’m at least gonna
offer this and I’ve you know frankly I
did not expect you know Tony to call me
back and be willing to listen to only
was he willing to listen like you said
he asked me to come back out come out
there and meet with him and when I did I
and I was went there and of course he’s
he he was in the middle of an event and
he had budget he broke out some time for
me and he said hey we’ve only got an
hour or 45 minutes or something like
that and I I talked for 10 minutes and
Tony I mean he was really like looked at
the other people the room his advisors
like I can’t believe some of what I’m
hearing and I said that’s really all I
got he goes are you serious and I said
yeah and I left and he called me I think
was the next day or a few days later and
said wow we looked at all that and I’m
learning something new let’s keep
talking and and I’ll tell you what I
love about Tony that matches the fur
because a lot of people have seen me in
the media maybe one one-thousandth of
the time you see Tony but stylistically
and physically were pretty different
people right but we have some things in
common yeah if you think about the title
the book unshakable when he came up with
that he said what do you think of that I
thought that’s absolutely perfect
because whenever you’re at a party and
you hear somebody say I lost everything
which you and I’ve heard the crowds me
running they hear that all the time
people were worth a hundred thousand
worth zero or they’re worth 20 million
and they’re worth you know half a
million and they go it was Oh a tour
that 9/11 or the tech bubble well it’s
impossible to have lost money through
those if you were invested even halfway
right and didn’t make a mistake and what
you really find is people they get in
their own way and because they’re
shakable right that most people react
negatively and why are they shaking but
why do they make those mistakes because
of uncertainty whereas the uncertainty
come from fear what where’s the fear no
education what does Tony do for a living
not just with money but everything else
he tries to compress the learning curve
for people help them figure out exactly
you know how to think about things and
give them a road map well that’s what
we’ve tried to do at creative planning
and we very successful at it were one of
the top independent firms in the country
we’re very proud of everything we
accomplished you know before the
partnership but when I write a letter
it’s not gonna be written by as many at
read by as many people as when Tony does
I wrote a book
Tony’s book said sold 20 times more
copies and I’ve been in the business for
20 years right so what a wonderful
opportunity to put a megaphone on what
we’ve been trying to do which is to
educate and empower people so if they
have that certainty so they become
unshakable and if your unshakable then
you’re gonna have a better investment
outcome it’s it’s that simple so his
messaging and what he was trying to do
it really matched up perfectly and it’s
been a great great ride ever since then
and I wanted to in this book the reason
I asked Peter to co-author it with me
was I wanted to cover not only the
psychology and I want to bring all these
other investors but I really wanted to
your people up so that when the
inevitable Corrections and the
inevitable bear market comes and we’re
right now approaching eight years the
second-largest you know bull market in
history when that changes and it always
does I wanted people protected and I
want to not only protect it I wanted him
to thrive not just survive and I had all
this great information for all these
individuals but Peter had taken his firm
and grown it geometrically with
virtually no advertising because he got
such unbelievable results in the midst
of the worst downturn you can imagine me
you guys grew from what to what do you
remember 500 million in a couple billion
and inside that two years in two years
entering the worst economic time
everybody gravitated to them because
everybody else is freaking out and here
are these people getting great results
so in the book the specifics about what
to do in a bear market the specific
plans and so forth are really Peters
playing so I’m also not a financial
legal financial planner my expertise is
psychology synthesis taking the very
best and then communicating ways someone
can act on it because I always say to
people knowledge is not power you know
knowledge is information its potential
power what’s real power is execution
you know execution Trump’s knowledge
every day of the week so I wanted to
write something short quick brief but
with a real plan that’s proven so that
you can literally become more fearless
or what we call in Jacob Peter I know
you you contributed to the book you
wrote some of that real plan talk a
little bit about your contribution of
the book and and what kinds of advice
you’re giving people well I think like
if you look at the financial services
industry of conflict but then you have
polar opposites and advice on the one
end you you have let’s go in the market
let’s go out of the market let’s trade
stocks all the time a lot of evidence it
doesn’t work for most people whether you
hear that from you want to believe
Buffett when he says it or Bogle when he
says it or I when I say it there’s a lot
of people would say that doesn’t work
but those people tend to be buy and hold
do nothing ever and by these eight
things and don’t ever do anything and I
think that’s a real big mistake and so
one of the great opportunities to be
able to write a little more specifically
in the book was hey look yes some of
this you know the crazy day trading in
your pajamas isn’t probably gonna work
out for you very well most hedge funds
you have access to are probably not
going to work out for you well and
here’s the evidence right we don’t just
say it we show the evidence
but hey you don’t have to just settle
for holding all the time it’s in the
bear market is that’s the opportunity
and so we outlined in the books use some
of the things that we did with our
clients to take advantage of that
opportunity so that where we’re not
doing nothing but we’re not doing things
that great damage either we’re trying to
stay in the game get the OP side but
when bad things happen that’s the chance
to really get ahead of the marketplace
so Tony it’s unusual to launch a book
and do a podcast at the same time why’d
you decide to do this that way I just
think that people are having a partner
an audio partner in some cases video
partner like this people can use net
time you know no extra time they knew
and they’re driving their car they can
do it when they’re working out they can
listen to it and reinforce it you know
obviously the podcast doesn’t go to the
depth of the book but I wanted to get
some of that core information out there
I mean the bottom line is neither one of
us are taking a dime from this book I
wrote this book so we can feed another
50 million people I’m gonna match that
so we feed another 100 million people on
the way to the billion that I’m going
for but I also want to just be able to
provide something that people really use
and I think if you combine audio with
the written word I think you got a
chance to read it’s all about
accessibility is it really is because as
easy as possible for people to get real
results so lots of people have massive
fears when it comes to the stock market
their emotions are in overdrive whenever
the talking heads are calling for the
next big crash and that seems like it’s
happening every other time but early in
the book you guys cover 7 freedom facts
which are some pretty mind-blowing facts
about market behavior that when you
people understand them they’re sure to
help free them from being their own
worst enemy and being so fearful about
participating in the stock market and
and when to make decisions let’s go
through them let’s talk about freedom
fact number one on average Corrections
have occurred about once a year since
1900 now that a lot or a little well you
tell me I think most people you know
they’re all worried about a correction
and when you see that literally in 115
years in 1900 2015 we’ve averaged one a
year it can allow you to say I don’t
need to react to this this is natural if
like a season winter comes every
here you know you know if you react the
winter and freak out you’re gonna be
stressed out all the time as opposed to
be prepared for winter take advantage of
winter some people freeze the death you
want to be well supplied so you can ski
snowmobile your family and friends and
hopefully do it up you can help those
that didn’t plan right that’s really
what it’s about so if you think about it
it only average correction last 56 days
so less than two months last year was a
perfect example 2016 if you remember
January the first what was at nine or
ten days of the month was the worst nine
attendings in the history of of stock
market openings a you know opening of
years and I remember at the time people
are freaking out you’re the market drop
well how many points was that the one
day was it selling under yeah no the one
day almost 500 yeah five six six hundred
I’m not positive but you know people
were freaking out everybody was in Davos
you know although all these people in
the world they went there they put Ray
Dalio on if you don’t have a value is
he’s the largest hedge fund I’m a
successful hedge fund guy in history
right and this is a man who’s you know
you had to have a five billion dollar
net worth and give him a hundred million
dollars ten years ago to take money now
I won’t take your money no matter who
you are and he had taught me in this in
the first book when he mastered the game
his formula I shared that formula and
and helped a lot of people he got up on
camera and people said what do we do the
world’s marking down the end is coming
and he said well Tony Robbins wrote this
book you know how to pick it up and in
the chapter he explained some ways to do
this so it was really gratifying to see
that that would make such a difference
for people but what really makes a
difference is to realize it didn’t last
the year and we broke all kinds of
records last year and but it looked so
dark it looked like it was the end and
so it’s really important for people know
this is on average 54 days less than two
months it happens every year like
clockwork now here’s what you got to
know though in the last hundred years
the average drop was 13% little more
than 13 now in the last 30 years the
average drop is in 14% well when you’re
lose 14% released on paper
pretty hard for most people to hang on
and so what do they do they sell it
exactly the worst time right and they
take those losses and make them
permanent the stock market never took
money from anybody only you can do that
by your decisions right and so if you
understand that this
is normal this is winter winter always
comes some are more severe than others
some are shorter some are longer but
they come every year then all of a
sudden your brain starts to go I don’t
have to overreact and what makes you
successful is to stay in the market and
there’s a lot of very very smart people
that you they can know all of this and
they’re still gonna react negatively
they have to be really empowered with
information and the reason is sometimes
there’s a kernel of truth sometimes
there isn’t and usually there’s a
narrative like if you look at what
Tony’s referencing early in 2016 January
February oil prices were plummeting OPEC
said they’re gonna let let oil float and
now we’ve got the US they’re talking
about recession eight of the ten major
banks the United States said oil was
going to go even lower so you haven’t
you have a narrative it’s not like it’s
randomly happening but we know this
story it’s kinda like going to a Sandra
Bullock movie we kind of know we’re
gonna laugh we’re gonna cry but use even
if you someone tells you the whole story
in advance there’s gonna be a point
where you’re supposed to be crying I’m
gonna look over at my wife is she’s
gonna be crying right I mean so we’re
humans we react when we’re going through
it even when we know what’s gonna happen
and I think the key is you have to not
only know what’s going on like Tony’s
talking about but you gotta take it a
step further and be excited about it
actually say this is this is an
opportunity I only get this opportunity
like Tony said about once a year now I
now is the time to go in action and once
you’ve made that shift you know you’ve
you’ve arrived you truly that first step
is the first step to being unshakable
and it’s based on a pattern of facts so
what’s another pattern another pattern
is okay this how do I know this is a
correction just to clarify for everyone
a correction a bear market as you know
is 20% drop from its peak right so
anything below that you know and the 10%
range or above is going to be a
correction and so most people are afraid
is this correction first of all most
people think of a correction as a bear
market they don’t make the difference
Yeah right they don’t see this as
temporary they don’t see as normal they
think oh my god the world is ending and
so then they make these dumb decisions
unfortunately that can destroy your
financial future but if you know that
these Corrections happen every year and
that less than 20% of them ever grow
into a bear market which means you know
one in five so one in five years that’s
really what we’re talking about then if
80% of time it’s not gonna get worse
then maybe I’d have to take advantage of
this maybe I’d when everybody else is
afraid
that is your greatest opportunity that
is Warren Buffett’s number-one you know
totems motto is take advantage during
those times so that’s freedom fact
number two that lesson twenty percent of
all Corrections will ever actually turn
into a bear markets right right let’s
talk about freedom fact number three
nobody can consistently predict whether
the market is going to rise or fall why
I think this is interesting because
there’s so much so many advisors that’s
what they’re selling right and so this
is what’s interesting about the
profession that they can’t predict yeah
that they’re selling hey I can predict I
can navigate this I mean there are
different words for it downside
protection or exit strategy you know
things like that but they’re all
generally related to forecasting and I
think what’s problematic with that is
people are trained when you go to a
professional if I go to a doctor if I go
to an architect or an engineer or CPA my
expectation is there’s some industry
standard based on academic evidence and
you’re gonna advise me and put me in a
better spot that’s couldn’t be further
from the truth in the financial services
profession most of the time you’d be
better off not hiring a particular
advisor and this would be one group to
be concerned about is to me it’s a great
litmus test if you’re sitting down with
somebody and you say hey tell me how
you’re gonna help me they go well I’m
gonna look at indicators and tell you
when eggs at the market that you can
stop the meeting right there get up and
as Tony talks about in his Ramos let’s
go go find somebody else it’s a great
Litton yeah Bogle said I’ve not only
never seen anybody can do it I’ve never
met anybody who met anybody that can do
it and also he had creative planning we
have 15,000 clients I’ve been doing this
about 20 years I am never in my career
ever seen a client exit the market and
get back in even moderately close to the
right time I mean forget about getting
it right now not even remotely close
then you get in transaction costs taxes
the outcome is very very negative so if
you don’t want to take the time to dig
through all the academic evidence that
it doesn’t work we talked a little bit
about it in the book why this is not a
fantastic strategy for you and why it’s
not predictable and once you realize
it’s not predictable it’s easier to have
a philosophy to take advantage whole
industry as you well know people get up
every single day and grab your eyeballs
on the television to tell you the
horrible thing is coming or the good
it’s coming but nobody statistically has
been able to consistently do that
there’s been a few of these guys that
really aren’t accessible to you arrayed
al you are Paul Tudor Jones somebody a
bat nature that have been able to go
20-plus years making money in all these
different markets but their funds are
closed so you’re not gonna be able to
get into them so anybody who’s promoting
that either either they believe what
they’re saying and they’re wrong or they
do it long enough until they’re right I
mean we talk about we show examples in
the book of people that there’s one man
who predicted 2008 and we problem is
he’s incorrectly predicted 2002 2003 and
the greatest investors many of the
greatest investors of all time don’t
believe in market timing so Buffett is
not a market timer you don’t see him
leave the market and go to cash you see
him 99% invested all the time and when
the market is correcting he looks for
value he doesn’t try to time it he buys
he waits says I don’t have to matter if
he’s gonna wait a month or two years
eventually the stock price will match
the value of that company so you can be
at one of the greatest investors of all
time whether you’re JP Morgan who would
ask you know what’s the stock market
gonna do he said it’s gonna fluctuate
right so you look at JP Morgan you look
at Buffett greatest investors of all
time they’re not market timing so if
you’re like a 42 year old guy working
with an advisor down the street in
Walnut Creek California who’s telling
you we can market time and forget it
it’s just as that scenario is not gonna
work for you just move on so that’s a
great segue to freedom fact number four
which is I think something that that
people forget or don’t know and is
extremely reassuring the fact that
despite short-term setbacks historically
the stock market rises over time you
know the markets up three out of four
years so seventy-seven percent of the
time but that’s over one year over three
years it’s up about ninety percent of
the time over five years it’s up more
than 95 percent of the time over 10
years it’s 98 1/2 percent of the time so
in the short run like tony was
mentioning earlier incredibly
unpredictable in the long run it’s
extremely predictable we know what the
markets gonna do over time not just the
stock market but the bond market over
the long run we have an expected return
that that comes about that that we can
count on at least with a reasonable
amount of probability and plan and plan
towards right but for some reason people
don’t easily think about the
long term well I think that’s with the
shredder I think part of its this this
myth that people believe they here the
market goes up and down that’s not true
the market goes up what it has is it has
intermediate periods where it’s down
kind of like inflation goes up and down
right
sometimes a candy bar goes down in price
doesn’t happen very often
but sometimes it does maybe you stock up
on candy bars then but over time we all
have the expectation as reasonable
people that ten years from now that Coke
is gonna cost more candy bars gonna cost
more a house is gonna cost more if you
believe that then you should believe
that about the stock market because part
of the returns just inflation but Tony
part of this is about psychology right
sometimes for some reason we focus more
on the negative events than we do in the
long term positive ones so even though
and I think this is freedom fact number
five that historically bear markets only
happen every three to five years
for some reason they seem to make in an
over large impression on an investor
psychology well I don’t care you know I
was talking to Jack Bogle who started
Vanguard you know three trillion dollars
in assets and he said I said what do you
do in America mark Wright goes I read
all my books and remind myself not to
sell anything cuz it’s it’s yes it
happens look let’s just say the figure
so everybody understands it since 1900
so 115 years we’ve had 34 bear markets
since 1947 we’ve had 14 so overall in a
hundred and fifteen years its average in
every three years in the last you know
50 years or so it’s an average about one
every five years but the problem is that
the average drop is thirty three percent
right and you know roughly a third of
the time the market drop is 40 percent
or more well when you lose at least on
paper in your head that’s still the part
of our brain that allows us to go into
fight or flight that survival mechanism
is triggered by money issues they’ve
done MRIs and shown it is if you were
literally your life was being threatened
and so when that happens unless you
train yourself to be unshakable unless
you know hey look this happens every
three to five years and if I try to get
out as we’re gonna show you in a few
moments I’m gonna have the wrong timing
I just need to stay in and I won’t lose
anything you’ll look like I’ve lost but
over the long term if I want to stick
with it I can make it happen because we
know what the returns are afterwards we
know how the market jumps after we’ve
taken this hit in a bear market
everybody members where were we in 2009
where are we today but what’s really
important to know is that in the midst
of all this these bear markets lasts on
average a year there’s a few times in
there a couple of years but usually on
average it’s a year so a year really is
any other business if you could get a
Ferrari for 50% off you would be pretty
excited right but my says the stock
market’s the only place in the world
when things go on sale when people freak
out and what you want to be is the
unshakable when everyone else is in
turmoil you wanna go this is the
greatest opportunity of my life let me
get these things now cuz they’re gonna
go back up and value because
historically that’s what’s happened in
the US markets for 200 years two
centuries no matter what you do American
business seems to find a way to resolve
and become more profitable whatever you
do part of that is our population grows
part of that is inflation and so the
combination of these factors and our
increased productivity as a society
which keeps growing especially with
technology allows these markets to
continue to grow so it’s gonna happen
every three to five years it’s gonna be
a 33 percent drop a 40 50 percent drop
but what we’re gonna show you in this
book is how to set up a portfolio how to
diversify so that when that happens you
don’t take that kind of a hit you’re
still in really great shape but more
importantly as Peter proved with all of
his clients during that time let’s go in
and let’s take an advantage of this this
is the chance to leapfrog from wherever
you are financially to where you really
want to be because this is where you’re
gonna see the greatest growth I don’t
remember the exact number I apologize
but I remember when I was doing research
I remember back in ADEA
but Joe Kennedy his father I can’t
member the exact number I apologize I
have to look it up but he his level of
wealth was sizable it was like 3 or 4
million if I remember correctly in 1929
but by 1932 was more than a hundred
million and the reason is because when
things melt down that is the opportunity
when everybody’s scared that’s Warren
Buffett that’s all the greatest
investors in the world and you can free
yourself from the fear when you go this
is it there’s a big winter about every
three to five years but winter doesn’t
last forever what always follows winter
is springtime
right this incredible growth that’s
really the essence of this so let’s
actually let’s talk about springtime
which it brings us to freedom fact
number six and I think this is a fact
that is often forgotten in the midst of
those bear markets when you’re seeing
that 30 40 percent paper loss it’s hard
to remember that bear markets become
bull markets and pessimism becomes
optimism yes
that’s what happens not 90 percent of
the time but 100 percent of the time and
I think that’s the hard thing for people
to grasp you know Tony was talking about
the frequency of bear markets there’s
there’s two things that make that
particularly troublesome for a lot of
investors and one is it happens every
three to five years but not necessarily
spaced out like that right sometimes you
have a tech bubble and then 911 and
you’re going geez I just went down 40
whatever percent I recovered I’ll get
hit again 40 something per so I’m just
not doing this anymore
well that’s obviously a spectacular
mistake because we know what’s happened
since then the markets up 10,000 plus
points same thing with Oh 809 if you
look at March 9 of 2009 the market
bottomed firm then it was up 65 percent
over the next few months when it turns
it turns very rapidly so I think I think
part of it is this that they’re not the
bear markets don’t space themselves out
sometimes they come so fast they freak
people out
sometimes five years passes and like
right now many of my clients some of my
clients will say well we’re due for a
bear market well doesn’t work like that
there have been periods in history oh 10
or 15 years we just don’t know what’s
going to happen is it gonna be terrorism
is it gonna be an industry bubble is it
something we’re not we’re not thinking
about that’s gonna drive those those
things but regardless the economy is
resilient people have this perception
that capitalism is fragile and the
economy is fragile and it’s in fact it’s
it’s quite the opposite and and the
market is a function of dividends which
we get paid in bear markets still it’s a
function a little bit of inflation and
then of over time rising profits and so
what’s happened in every single bear
market in history is those things have
prevailed and the markets gone on to a
new high so let’s say you’re the worst
investor in the world you put all your
money in the market the day before the
crashing in late oh seven that starts in
late oh seven you put all your money in
before 9/11 or the tech bubble well we
were talking about the average bear
market being 33% these happen to be
three of the worst bear markets of all
time and they’re fresh on everyone’s
minds
if you put all your money a hundred
percent in stocks then well today your
infinitely wealthier right so it’s that
hard to screw up if you’re educated you
have the discipline and you take
advantage of lovers you get in the game
and stay in the game that’s the biggest
challenge for people of course that’s
right and I think that that brings us to
a fact that I think is incredibly
important and that people really don’t
realize or appreciate or just plain
forget your freedom fact number seven
the greatest danger is actually being
out of the market now this is totally
counterintuitive right cuz everybody
says look the ideal would be you get in
at the right time and go up and then you
get out before it goes down but you know
no one’s ever been able to predict that
of the best of the best of the world but
here’s the fact that’ll blow your mind
JP Morgan did a study and swab both
independently did studies over 20-year
periods of time so in 1996 the 2015 and
they found it on average if you and the
sp500 you have an eight point two
percent return which compounding over
time is extraordinary for people helps
you get to that wealth but in those
twenty years if you just missed the ten
best trading days ten days out of twenty
years and your return would be four
point five percent it would literally
almost be cut in half just by missing
those two days how are you gonna know in
twenty years which of those ten days are
give me other statistics of what happens
with what what do you days I think one
of the big misperceptions is okay the if
the markets at ten thousand like it was
a few years ago and I wait well what
what what are their only three things
that can happen if I’m in cash one is
the market goes down
I feel great but am I gonna go in at
nine thousand do I really feel great
about the market at nine thousand I
didn’t feel good at ten I still have not
met that investor in my you know long
career second it goes sideways I lose
dividends are better than being in cash
or a CD third it goes up now the problem
with it going up is it might not come
back to ten thousand it might do exactly
what it did go to eleven twelve thirteen
fifteen nineteen nine you know you lost
Rob you’ve lost your opportunity now if
I go in there’s three things that can
happen it goes up I’m high-fiving
everyone around me it can go sideways
I’m better than cash it can go down big
deal I can buy more or I wait it out
that’s the worst thing in the world that
happens is I wait it out so being out
it’s like Tony says counter in two
being out is what results in permanent
loss being in the worst outcome that can
happen and it’s still a low probability
event is temporary loss of capital so
Peter isn’t it also true that those
advisers who are not fiduciaries who are
brokers they will make money whether
they’re encouraging you to buy or sell
so they actually have a disincentive to
advise you hey don’t do anything stay
the course you’re going to be fine I
think it’s when you’re in the brokerage
world you just don’t know how anyone’s
being compensated if they disclose it to
you usually there will be conflict
sometimes they get paid commissions so
there’s an incentive for activity
sometimes they get paid a fee but only
if you’re in certain asset classes so
there’s an incentive for you to be in
those asset classes sometimes they get
paid different fees and different asset
classes so there’s incentive for you to
take risks you might not want to take
and those incentives have nothing with
your best interest that’s just the
incentives of what makes the most money
for the corporation they might have
their own bond desk they might have
their own mutual funds they might have
their own hedge funds and so I think the
key is you want to have an advisor you
pay a fee and that fees the same on all
of the investment advice all of the time
and we you can get yourself to that
which I mean like Tony said at the top
of the of this that’s extremely rare
unfortunately in this profession but if
you can find somebody whose investment
fees the same no matter what they do
what out no matter what they recommend
that’s the best case scenario in terms
of at least having an alignment before
we even get to the next steps with
advisors and I want you know I give the
ten days below to give them the second
statistic they found in those twenty
years if you have a market 20 days the
20 best days you’re eight point two
drops the two point one you might have
had your money in a Treasury or
something of that nature right and if
you missed the top 30 days in 20 years
you lost money and so how are you ever
going to time that and then the best
fact that we found was extraordinary and
this was done by JP Morgan
they found that six of the ten biggest
trading days upsides were within two
weeks of the 10 worst trading days so
it’s like when people’s got surfing
ripped open that’s when the greatest
explosion of opportunity happens we wrap
how far now Peter I don’t seems latest
statistics from where we were in 2009
how much was the growth bit on the
market have forgotten I mean I’m looking
at the Dow under 7,000 now near 20,000
so several hundred percent with
dividends and look at all these people
that are sat out because they
afraid the markets going up and down
where’s where’s the money gonna go with
the market can’t last this long every
story that you hear and what really
kills me is I guess it’s two extremes
its Millennials because they’re just not
in the market right they’ve been there
like the generation that went through
the Great Depression they saw what
happened to their families and to their
parents and some of them to themselves
that they’re the leading edge to that
and they’re just staying out of the
market and they’re the core years where
they could with a very small amount of
money become financially free because
the power of compounding with time and
then you got baby boomers that have been
sitting out they can’t afford to set out
at this time but they don’t know how to
get a plan together that can protect
them in the worst situation so they
don’t have to be fearful and they don’t
know how to take advantage of it that’s
what I’m shakin bowls really teaching
it’s clearly more than money
but in this context what does it truly
mean to be unshakable it’s a state of
mind it relates to money because most
people when they’re trying to figure out
how to create financial freedom create
more stress for themselves worrying
about what’s going on and when you’re
truly unshakable you have the mindset
where you understand how the market
works you understand that real estate
can go up or down stocks can go up or
down but your family can still do well
unshakable is a bear market can come a
correction can come and there’s no fear
in you or if there is a little fear
we’re all human you don’t stay there you
find a way to break through you find
your Center and when you have that
Center you do what’s right to be able to
take care of yourself and your family so
we live in a world right now where most
people don’t even believe they can
achieve financial freedom anymore
because there’s so much volatility I
mean think about it we have negative
interest rates and 5,000 years richard
banking we’ve never in our history had a
place where i gave you my money and i
paid you to hang on to it i give you my
money to a bank you pay me for interest
i make money off of it and then they
loan it to someone else we’re living in
times that are crazy toyota right now
has a bond that they’re selling for
0.001 that’s your return for giving the
money it’ll take you 69 thousand years
to double your money i’m this has never
happened in history and i was
interviewing about a year and a half ago
you know the former Fed chair alan
greenspan who for 19 years the most
powerful man in finance in the world
under 4 different presidents spent five
hours with him about three privately and
two on stage in front of a group and one
of my final questions to him when we
talked about all this crazy change and
all this volatility and how do people
get things together i said look if you
were back head of the Fed today what
would you do and there was this long
pause he paused he pause and they lean
to me said Tony I’d resign that did not
build much confidence in me or anybody
else who’d be watching and yet in the
midst of all that as you well know
there’s a few unicorns in the financial
market very few these people that have
found a way to do well over all the
decades in good times and in bad and
they know what it takes to be unshakable
and it isn’t just guts or confidence
it’s understanding certain facts that
when you know them they for you the
metaphor I give people is that you know
if you go yeah most of us have heard the
old Sufi metaphor ever you know the man
is walking along in the middle of the
night and he sees a snake and freaks out
runs away and he comes in in the morning
and what does he see it was a rope and
so once you know it’s a rope you know
you can be there in the middle of the
night you’re not scared again this book
unshakable is this it’s really a
financial freedom playbook for anybody
it’s the real essentials about how to go
from where you are to where you really
want to be but how to do it with peace
of mind how to do it even when things
are volatile and enjoy yourself and I’m
really proud that we’re also donating a
hundred percent of the profits as we did
with money master the game to feed
another 50 million people we’re gonna
feed I’ve said to a million people in
the last two years with feeding
America’s my partner I’m gonna feed a
billion people and this is part of that
so this book is something that can
change somebody’s life and while you’re
doing it really take care of other
people that are in need we got 45
million people in this country they
don’t know where their next meals coming
from 17 million or children while you’re
changing your own life we want to make a
difference for them – you mentioned
money master the game you wrote that
book two years ago and in the two years
since it sold over a million copies
incredibly impressive
so why another book now why why did you
write unshakable well I’m really proud
of money mask of the game and I hope
people still pick it up and read it but
it is six hundred and seventy pages you
know what I did as I said I saw what
happened 2008 and I said this can’t be I
have the good fortune of having coached
Paul Tudor Jones one of the top ten
financial traders in the history of the
world for the last twenty four years and
he hasn’t lost money in those twenty
four years that I worked with him so as
a result of that I’ve learned a lot as
you might imagine he’s literally emails
me each day we measured these elements
for two and a half decades but at the
same time when 2008 half and I saw
people losing their homes I saw people
losing half their net worth overnight
and I knew what was the trigger because
I was working with Paul so I thought
what if I wrote a book where I
interviewed the smartest financial
people in the world the people you and I
both have the privilege to interact with
now and I interviewed 50 of them not
people from the lucky sperm Club but
people who literally started with
nothing and built
in that scope and they did it to
investing and what I learned were the
strategies that could change anybody’s
life so I put that in the book in and I
was gratified that it became number one
New York Times bestseller and she said
sold a million copies and hardback but
in addition to that what was really cool
was people’s lives were changed by that
book cuz it wasn’t me it was the best
investors in the world sharing it with
you and so I don’t like writing books I
you know rather pull out my teeth quite
Frank Cody and I hadn’t written a book
for 20 years and Steve Forbes said it
was you know if there was a Pulitzer
Prize for an investment book this one
would win hands down so I wrote this
great book so answer your question why
another one because in the last year and
a half these crazy changes were talking
about with feds all the world are
happening volatility has increased no
one is clear where the world is going I
was talking to Howard Marks of oaktree
capital and he wrote he manages a
hundred billion dollars and he said to
me so Tony you know if you’re not
confused you don’t know what’s going on
it’s if that’s the world that we’re in
so I thought I want to do three things
with this book I want to write a short
book I want to find a book that you can
hold in your hand that lift weights with
it and that you could read in a weekend
or you know a long day if you’re really
committed to and give you all the
essentials that can change your life but
the second reason I wrote it besides a
short book that anybody can get through
and use is I really wanted to write a
book where we could dispel the fear
where we could take that you know snake
and turn it into the rope that it really
is so that you can begin to understand
that there’s no reason to fear these
things and you can participate in this
tremendous opportunity the market for
people to grow and even take advantage
of the worst times because I know you
know that the greatest time for someone
to leapfrog from financial survival to
financial freedom is during the toughest
times things burn down faster than they
grow the opportunities are extraordinary
at that time and we’re going to talk
about that and our next podcast to give
people some real specifics but it is
your opportunity to really leapfrog from
where you are to where you want to be
and you want to be prepared so you don’t
get hurt and you want to take advantage
because that’s where the greatest
opportunities are you know you you
listening to somebody like Warren
Buffett I had the privilege of
interviewing and his whole approach is I
want to be absent to take advantage I
want to be in a position when everyone
else is afraid I want to be greedy
whenever there’s a greedy I want to be
fraid and so this book really showed you
that and then the third and final reason
I wrote this is the financial industry
is that is made up of good human beings
very talented beings but this incentives
in that system are not to take care of
you as the investor these are
corporations they’re multi-billion
almost some of them approaching a
trillion dollars over decades of revenue
that they’re generating and their number
one focus is to take care of their
shareholders well the way you do that is
more fees and the fees are so hidden
that most people know the Obama
administration this last year at least
on the fall one case I try to pass some
rules that look like they may just get
ejected now under the Trump
administration but it’s because 17
billion dollars and fees are being taken
from people you know 1% in fees just 1%
more than you need to pay because of
compounding will cost you 10 years of
income in retirement it could be the
difference between retiring broke having
money for a few years or having for as
long as you live so I really want to
take care of people and protect people
and so those three things write a short
book you can absorb right now that
anyone can use whether you’re a
millennial just getting started and
you’ve all this debt and think you’ll
never get free or whether your baby
boomers think you started too late
here’s the financial playbook to really
get you where you want to go so Tony
folks here listening the podcast can’t
hear this but sitting alongside us here
is Peter Luke talk a little bit about
how the two of you connected and how
Peter came to be the co-author with you
of unshakable well first of all I have
unbelievable spec for Peters we’re
partners and has become a dear dear
friend of mine but it’s kind of
interesting I wrote money master the
game I dug in and pulled out all of the
abuses that I thought had happened in
the system you know we went out and kind
of freed people from this and they’re
able to put ten years sometimes 20 years
of them come back in their pocket but
then I got a call from Peter and I had
actually been really focused on what’s
called the fiduciary stand it’s a big
word but what it really means is most
financial people that you go to most
people that you consider to be a
financial consultant or a supporter or
whoever you want to call them they’re
brokers ninety percent are brokers
nothing wrong with a broker but a broker
does not have to put your needs ahead of
their own it’s crazy all they got to do
is give me an investment that’s called
suitable which means they think it’ll
work for you that’s
but there’s less than 10% of the 300,000
people in the financial industry
the ones that aren’t brokers least
independent registered investment
advisors are called fiduciaries they are
responsible to legally put your needs
ahead of their own if you may say by
Apple this morning and they buy it
themselves for themselves this afternoon
and they get a better deal but while
requires they give you their stock
that’s how strong the laws are but it’s
a real small subset of groups so I was
promoting fiduciaries and I even
recommended a series of like ten
different firms and Peter’s firm was one
of those because his firm and Peter
himself as you said earlier he’s the
only firm and he’s the only individual
financial adviser to be named by
Barron’s three years in a row as the
number one financial advisor in the
country so his track record was
extraordinary so when he called me up
and said Tony I know you care so much
about people you’re trying to protect
them but there’s some dead bodies you
need to see out there there’s there’s
ways of manipulating the system even
four people are called in some
fiduciaries and he flew out on a weekend
I was doing a seminar he never leaves in
the weekend with his family I really
respect him for that but it was the only
time we could meet travel though that
way we sat down and he dropped this set
of insights on me and I was devastated
quite frankly I was angry I was pissed
off I mean like how could people do this
take advantage of people and also
because I’m trying to steer people in
the right way and I found some of these
individuals these organizations who I
really like in order to try to survive
and make enough money they’ve adapted
some interesting approaches that we’re
gonna talk about here but Peters want to
free that and when I sat there at the
end of it I was like Peter I said you
know what you’re doing here you he’s
created a home office for people you
know you know billionaires have home
offices they have a dozen people seven
eight nine people whose entire focus is
every aspect they’re not just what’s
putting together a portfolio they
looking at protect your wrist they look
at your taxes they look at estate
planning look at everything to take care
of you and you know usually got to be a
billionaire to do that he started doing
that for millionaires you know for her
small businesses which is the backbone
of this country and I said to him I said
what if we partnered but I said if we
partnered I would love to join your
board I would love to you know step in
and really help you understand by being
maybe the chief investor psychology how
investors think so we meet there
this needs even more so but he’s already
managing now twenty two billion dollars
you’re number one I said but would you
be willing to do this for people with a
little as a hundred thousand dollars so
that the average person just beginning
the journey someone who’s early in the
journey could still does there have to
be a millionaire a billionaire to do it
and he went back talked to his team and
came back and said we can set up another
division and do this so we became
partners and so now I’m I’m partner with
him in this in the firm I’m on the board
directors partners in writing the book
and I just want to get this message out
and Peter’s one of the smartest guys and
he’s the guy that navigated 2008 to 2009
during that time the Big Bear and you
know one of the greatest economic
challenges in our history and we’ll talk
a little bit later about how well they
did quite extraordinary
Peter I think a lot of people would be
reluctant to reach out to Tony Robinson
say hey Tony I love the book but I got
to tell you there’s some things you need
to know talk a little bit about what
prompted you to to reach out to Tony
well I read the book I mean a lot of my
clients had read the book they come in
with the book in their hand and they say
talk to me about are you a fiduciary
Knoll and I loved it because most of it
spoke directly to what we were already
doing and I could tell from reading it
that he had really tried to navigate all
of this that somewhere along the way he
got pissed off about something I found
out later it was his 401 k plan and he
decided he was just gonna figure it out
and this book was an incredible attempt
at that abhi he’s interviewing these 50
50 I’ve never seen I don’t think it has
ever been done where you have that many
successful people at investing with
different points of views but very
common thread through most of them and
he’s bringing all those ideas but he had
a couple things that really stood out
that were the same thing we talk about
creative planning you should have a
fiduciary you should be sensitive to
fees you should be sensitive to
conflicts don’t try to market time don’t
waste your time trading stocks all day
in your pajamas at home these are the
core message really matched up with us
so I thought hey I’m at least gonna
offer this and I’ve you know frankly I
did not expect you know Tony to call me
back and be willing to listen to only
was he willing to listen like you said
he asked me to come back out come out
there and meet with him and when I did I
and I was went there and of course he’s
he he was in the middle of an event and
he had budget he broke out some time for
me and he said hey we’ve only got an
hour or 45 minutes or something like
that and I I talked for 10 minutes and
Tony I mean he was really like looked at
the other people the room his advisors
like I can’t believe some of what I’m
hearing and I said that’s really all I
got he goes are you serious and I said
yeah and I left and he called me I think
was the next day or a few days later and
said wow we looked at all that and I’m
learning something new let’s keep
talking and and I’ll tell you what I
love about Tony that matches the fur
because a lot of people have seen me in
the media maybe one one-thousandth of
the time you see Tony but stylistically
and physically were pretty different
people right but we have some things in
common yeah if you think about the title
the book unshakable when he came up with
that he said what do you think of that I
thought that’s absolutely perfect
because whenever you’re at a party and
you hear somebody say I lost everything
which you and I’ve heard the crowds me
running they hear that all the time
people were worth a hundred thousand
worth zero or they’re worth 20 million
and they’re worth you know half a
million and they go it was Oh a tour
that 9/11 or the tech bubble well it’s
impossible to have lost money through
those if you were invested even halfway
right and didn’t make a mistake and what
you really find is people they get in
their own way and because they’re
shakable right that most people react
negatively and why are they shaking but
why do they make those mistakes because
of uncertainty whereas the uncertainty
come from fear what where’s the fear no
education what does Tony do for a living
not just with money but everything else
he tries to compress the learning curve
for people help them figure out exactly
you know how to think about things and
give them a road map well that’s what
we’ve tried to do at creative planning
and we very successful at it were one of
the top independent firms in the country
we’re very proud of everything we
accomplished you know before the
partnership but when I write a letter
it’s not gonna be written by as many at
read by as many people as when Tony does
I wrote a book
Tony’s book said sold 20 times more
copies and I’ve been in the business for
20 years right so what a wonderful
opportunity to put a megaphone on what
we’ve been trying to do which is to
educate and empower people so if they
have that certainty so they become
unshakable and if your unshakable then
you’re gonna have a better investment
outcome it’s it’s that simple so his
messaging and what he was trying to do
it really matched up perfectly and it’s
been a great great ride ever since then
and I wanted to in this book the reason
I asked Peter to co-author it with me
was I wanted to cover not only the
psychology and I want to bring all these
other investors but I really wanted to
your people up so that when the
inevitable Corrections and the
inevitable bear market comes and we’re
right now approaching eight years the
second-largest you know bull market in
history when that changes and it always
does I wanted people protected and I
want to not only protect it I wanted him
to thrive not just survive and I had all
this great information for all these
individuals but Peter had taken his firm
and grown it geometrically with
virtually no advertising because he got
such unbelievable results in the midst
of the worst downturn you can imagine me
you guys grew from what to what do you
remember 500 million in a couple billion
and inside that two years in two years
entering the worst economic time
everybody gravitated to them because
everybody else is freaking out and here
are these people getting great results
so in the book the specifics about what
to do in a bear market the specific
plans and so forth are really Peters
playing so I’m also not a financial
legal financial planner my expertise is
psychology synthesis taking the very
best and then communicating ways someone
can act on it because I always say to
people knowledge is not power you know
knowledge is information its potential
power what’s real power is execution
you know execution Trump’s knowledge
every day of the week so I wanted to
write something short quick brief but
with a real plan that’s proven so that
you can literally become more fearless
or what we call in Jacob Peter I know
you you contributed to the book you
wrote some of that real plan talk a
little bit about your contribution of
the book and and what kinds of advice
you’re giving people well I think like
if you look at the financial services
industry of conflict but then you have
polar opposites and advice on the one
end you you have let’s go in the market
let’s go out of the market let’s trade
stocks all the time a lot of evidence it
doesn’t work for most people whether you
hear that from you want to believe
Buffett when he says it or Bogle when he
says it or I when I say it there’s a lot
of people would say that doesn’t work
but those people tend to be buy and hold
do nothing ever and by these eight
things and don’t ever do anything and I
think that’s a real big mistake and so
one of the great opportunities to be
able to write a little more specifically
in the book was hey look yes some of
this you know the crazy day trading in
your pajamas isn’t probably gonna work
out for you very well most hedge funds
you have access to are probably not
going to work out for you well and
here’s the evidence right we don’t just
say it we show the evidence
but hey you don’t have to just settle
for holding all the time it’s in the
bear market is that’s the opportunity
and so we outlined in the books use some
of the things that we did with our
clients to take advantage of that
opportunity so that where we’re not
doing nothing but we’re not doing things
that great damage either we’re trying to
stay in the game get the OP side but
when bad things happen that’s the chance
to really get ahead of the marketplace
so Tony it’s unusual to launch a book
and do a podcast at the same time why’d
you decide to do this that way I just
think that people are having a partner
an audio partner in some cases video
partner like this people can use net
time you know no extra time they knew
and they’re driving their car they can
do it when they’re working out they can
listen to it and reinforce it you know
obviously the podcast doesn’t go to the
depth of the book but I wanted to get
some of that core information out there
I mean the bottom line is neither one of
us are taking a dime from this book I
wrote this book so we can feed another
50 million people I’m gonna match that
so we feed another 100 million people on
the way to the billion that I’m going
for but I also want to just be able to
provide something that people really use
and I think if you combine audio with
the written word I think you got a
chance to read it’s all about
accessibility is it really is because as
easy as possible for people to get real
results so lots of people have massive
fears when it comes to the stock market
their emotions are in overdrive whenever
the talking heads are calling for the
next big crash and that seems like it’s
happening every other time but early in
the book you guys cover 7 freedom facts
which are some pretty mind-blowing facts
about market behavior that when you
people understand them they’re sure to
help free them from being their own
worst enemy and being so fearful about
participating in the stock market and
and when to make decisions let’s go
through them let’s talk about freedom
fact number one on average Corrections
have occurred about once a year since
1900 now that a lot or a little well you
tell me I think most people you know
they’re all worried about a correction
and when you see that literally in 115
years in 1900 2015 we’ve averaged one a
year it can allow you to say I don’t
need to react to this this is natural if
like a season winter comes every
here you know you know if you react the
winter and freak out you’re gonna be
stressed out all the time as opposed to
be prepared for winter take advantage of
winter some people freeze the death you
want to be well supplied so you can ski
snowmobile your family and friends and
hopefully do it up you can help those
that didn’t plan right that’s really
what it’s about so if you think about it
it only average correction last 56 days
so less than two months last year was a
perfect example 2016 if you remember
January the first what was at nine or
ten days of the month was the worst nine
attendings in the history of of stock
market openings a you know opening of
years and I remember at the time people
are freaking out you’re the market drop
well how many points was that the one
day was it selling under yeah no the one
day almost 500 yeah five six six hundred
I’m not positive but you know people
were freaking out everybody was in Davos
you know although all these people in
the world they went there they put Ray
Dalio on if you don’t have a value is
he’s the largest hedge fund I’m a
successful hedge fund guy in history
right and this is a man who’s you know
you had to have a five billion dollar
net worth and give him a hundred million
dollars ten years ago to take money now
I won’t take your money no matter who
you are and he had taught me in this in
the first book when he mastered the game
his formula I shared that formula and
and helped a lot of people he got up on
camera and people said what do we do the
world’s marking down the end is coming
and he said well Tony Robbins wrote this
book you know how to pick it up and in
the chapter he explained some ways to do
this so it was really gratifying to see
that that would make such a difference
for people but what really makes a
difference is to realize it didn’t last
the year and we broke all kinds of
records last year and but it looked so
dark it looked like it was the end and
so it’s really important for people know
this is on average 54 days less than two
months it happens every year like
clockwork now here’s what you got to
know though in the last hundred years
the average drop was 13% little more
than 13 now in the last 30 years the
average drop is in 14% well when you’re
lose 14% released on paper
pretty hard for most people to hang on
and so what do they do they sell it
exactly the worst time right and they
take those losses and make them
permanent the stock market never took
money from anybody only you can do that
by your decisions right and so if you
understand that this
is normal this is winter winter always
comes some are more severe than others
some are shorter some are longer but
they come every year then all of a
sudden your brain starts to go I don’t
have to overreact and what makes you
successful is to stay in the market and
there’s a lot of very very smart people
that you they can know all of this and
they’re still gonna react negatively
they have to be really empowered with
information and the reason is sometimes
there’s a kernel of truth sometimes
there isn’t and usually there’s a
narrative like if you look at what
Tony’s referencing early in 2016 January
February oil prices were plummeting OPEC
said they’re gonna let let oil float and
now we’ve got the US they’re talking
about recession eight of the ten major
banks the United States said oil was
going to go even lower so you haven’t
you have a narrative it’s not like it’s
randomly happening but we know this
story it’s kinda like going to a Sandra
Bullock movie we kind of know we’re
gonna laugh we’re gonna cry but use even
if you someone tells you the whole story
in advance there’s gonna be a point
where you’re supposed to be crying I’m
gonna look over at my wife is she’s
gonna be crying right I mean so we’re
humans we react when we’re going through
it even when we know what’s gonna happen
and I think the key is you have to not
only know what’s going on like Tony’s
talking about but you gotta take it a
step further and be excited about it
actually say this is this is an
opportunity I only get this opportunity
like Tony said about once a year now I
now is the time to go in action and once
you’ve made that shift you know you’ve
you’ve arrived you truly that first step
is the first step to being unshakable
and it’s based on a pattern of facts so
what’s another pattern another pattern
is okay this how do I know this is a
correction just to clarify for everyone
a correction a bear market as you know
is 20% drop from its peak right so
anything below that you know and the 10%
range or above is going to be a
correction and so most people are afraid
is this correction first of all most
people think of a correction as a bear
market they don’t make the difference
Yeah right they don’t see this as
temporary they don’t see as normal they
think oh my god the world is ending and
so then they make these dumb decisions
unfortunately that can destroy your
financial future but if you know that
these Corrections happen every year and
that less than 20% of them ever grow
into a bear market which means you know
one in five so one in five years that’s
really what we’re talking about then if
80% of time it’s not gonna get worse
then maybe I’d have to take advantage of
this maybe I’d when everybody else is
afraid
that is your greatest opportunity that
is Warren Buffett’s number-one you know
totems motto is take advantage during
those times so that’s freedom fact
number two that lesson twenty percent of
all Corrections will ever actually turn
into a bear markets right right let’s
talk about freedom fact number three
nobody can consistently predict whether
the market is going to rise or fall why
I think this is interesting because
there’s so much so many advisors that’s
what they’re selling right and so this
is what’s interesting about the
profession that they can’t predict yeah
that they’re selling hey I can predict I
can navigate this I mean there are
different words for it downside
protection or exit strategy you know
things like that but they’re all
generally related to forecasting and I
think what’s problematic with that is
people are trained when you go to a
professional if I go to a doctor if I go
to an architect or an engineer or CPA my
expectation is there’s some industry
standard based on academic evidence and
you’re gonna advise me and put me in a
better spot that’s couldn’t be further
from the truth in the financial services
profession most of the time you’d be
better off not hiring a particular
advisor and this would be one group to
be concerned about is to me it’s a great
litmus test if you’re sitting down with
somebody and you say hey tell me how
you’re gonna help me they go well I’m
gonna look at indicators and tell you
when eggs at the market that you can
stop the meeting right there get up and
as Tony talks about in his Ramos let’s
go go find somebody else it’s a great
Litton yeah Bogle said I’ve not only
never seen anybody can do it I’ve never
met anybody who met anybody that can do
it and also he had creative planning we
have 15,000 clients I’ve been doing this
about 20 years I am never in my career
ever seen a client exit the market and
get back in even moderately close to the
right time I mean forget about getting
it right now not even remotely close
then you get in transaction costs taxes
the outcome is very very negative so if
you don’t want to take the time to dig
through all the academic evidence that
it doesn’t work we talked a little bit
about it in the book why this is not a
fantastic strategy for you and why it’s
not predictable and once you realize
it’s not predictable it’s easier to have
a philosophy to take advantage whole
industry as you well know people get up
every single day and grab your eyeballs
on the television to tell you the
horrible thing is coming or the good
it’s coming but nobody statistically has
been able to consistently do that
there’s been a few of these guys that
really aren’t accessible to you arrayed
al you are Paul Tudor Jones somebody a
bat nature that have been able to go
20-plus years making money in all these
different markets but their funds are
closed so you’re not gonna be able to
get into them so anybody who’s promoting
that either either they believe what
they’re saying and they’re wrong or they
do it long enough until they’re right I
mean we talk about we show examples in
the book of people that there’s one man
who predicted 2008 and we problem is
he’s incorrectly predicted 2002 2003 and
the greatest investors many of the
greatest investors of all time don’t
believe in market timing so Buffett is
not a market timer you don’t see him
leave the market and go to cash you see
him 99% invested all the time and when
the market is correcting he looks for
value he doesn’t try to time it he buys
he waits says I don’t have to matter if
he’s gonna wait a month or two years
eventually the stock price will match
the value of that company so you can be
at one of the greatest investors of all
time whether you’re JP Morgan who would
ask you know what’s the stock market
gonna do he said it’s gonna fluctuate
right so you look at JP Morgan you look
at Buffett greatest investors of all
time they’re not market timing so if
you’re like a 42 year old guy working
with an advisor down the street in
Walnut Creek California who’s telling
you we can market time and forget it
it’s just as that scenario is not gonna
work for you just move on so that’s a
great segue to freedom fact number four
which is I think something that that
people forget or don’t know and is
extremely reassuring the fact that
despite short-term setbacks historically
the stock market rises over time you
know the markets up three out of four
years so seventy-seven percent of the
time but that’s over one year over three
years it’s up about ninety percent of
the time over five years it’s up more
than 95 percent of the time over 10
years it’s 98 1/2 percent of the time so
in the short run like tony was
mentioning earlier incredibly
unpredictable in the long run it’s
extremely predictable we know what the
markets gonna do over time not just the
stock market but the bond market over
the long run we have an expected return
that that comes about that that we can
count on at least with a reasonable
amount of probability and plan and plan
towards right but for some reason people
don’t easily think about the
long term well I think that’s with the
shredder I think part of its this this
myth that people believe they here the
market goes up and down that’s not true
the market goes up what it has is it has
intermediate periods where it’s down
kind of like inflation goes up and down
right
sometimes a candy bar goes down in price
doesn’t happen very often
but sometimes it does maybe you stock up
on candy bars then but over time we all
have the expectation as reasonable
people that ten years from now that Coke
is gonna cost more candy bars gonna cost
more a house is gonna cost more if you
believe that then you should believe
that about the stock market because part
of the returns just inflation but Tony
part of this is about psychology right
sometimes for some reason we focus more
on the negative events than we do in the
long term positive ones so even though
and I think this is freedom fact number
five that historically bear markets only
happen every three to five years
for some reason they seem to make in an
over large impression on an investor
psychology well I don’t care you know I
was talking to Jack Bogle who started
Vanguard you know three trillion dollars
in assets and he said I said what do you
do in America mark Wright goes I read
all my books and remind myself not to
sell anything cuz it’s it’s yes it
happens look let’s just say the figure
so everybody understands it since 1900
so 115 years we’ve had 34 bear markets
since 1947 we’ve had 14 so overall in a
hundred and fifteen years its average in
every three years in the last you know
50 years or so it’s an average about one
every five years but the problem is that
the average drop is thirty three percent
right and you know roughly a third of
the time the market drop is 40 percent
or more well when you lose at least on
paper in your head that’s still the part
of our brain that allows us to go into
fight or flight that survival mechanism
is triggered by money issues they’ve
done MRIs and shown it is if you were
literally your life was being threatened
and so when that happens unless you
train yourself to be unshakable unless
you know hey look this happens every
three to five years and if I try to get
out as we’re gonna show you in a few
moments I’m gonna have the wrong timing
I just need to stay in and I won’t lose
anything you’ll look like I’ve lost but
over the long term if I want to stick
with it I can make it happen because we
know what the returns are afterwards we
know how the market jumps after we’ve
taken this hit in a bear market
everybody members where were we in 2009
where are we today but what’s really
important to know is that in the midst
of all this these bear markets lasts on
average a year there’s a few times in
there a couple of years but usually on
average it’s a year so a year really is
any other business if you could get a
Ferrari for 50% off you would be pretty
excited right but my says the stock
market’s the only place in the world
when things go on sale when people freak
out and what you want to be is the
unshakable when everyone else is in
turmoil you wanna go this is the
greatest opportunity of my life let me
get these things now cuz they’re gonna
go back up and value because
historically that’s what’s happened in
the US markets for 200 years two
centuries no matter what you do American
business seems to find a way to resolve
and become more profitable whatever you
do part of that is our population grows
part of that is inflation and so the
combination of these factors and our
increased productivity as a society
which keeps growing especially with
technology allows these markets to
continue to grow so it’s gonna happen
every three to five years it’s gonna be
a 33 percent drop a 40 50 percent drop
but what we’re gonna show you in this
book is how to set up a portfolio how to
diversify so that when that happens you
don’t take that kind of a hit you’re
still in really great shape but more
importantly as Peter proved with all of
his clients during that time let’s go in
and let’s take an advantage of this this
is the chance to leapfrog from wherever
you are financially to where you really
want to be because this is where you’re
gonna see the greatest growth I don’t
remember the exact number I apologize
but I remember when I was doing research
I remember back in ADEA
but Joe Kennedy his father I can’t
member the exact number I apologize I
have to look it up but he his level of
wealth was sizable it was like 3 or 4
million if I remember correctly in 1929
but by 1932 was more than a hundred
million and the reason is because when
things melt down that is the opportunity
when everybody’s scared that’s Warren
Buffett that’s all the greatest
investors in the world and you can free
yourself from the fear when you go this
is it there’s a big winter about every
three to five years but winter doesn’t
last forever what always follows winter
is springtime
right this incredible growth that’s
really the essence of this so let’s
actually let’s talk about springtime
which it brings us to freedom fact
number six and I think this is a fact
that is often forgotten in the midst of
those bear markets when you’re seeing
that 30 40 percent paper loss it’s hard
to remember that bear markets become
bull markets and pessimism becomes
optimism yes
that’s what happens not 90 percent of
the time but 100 percent of the time and
I think that’s the hard thing for people
to grasp you know Tony was talking about
the frequency of bear markets there’s
there’s two things that make that
particularly troublesome for a lot of
investors and one is it happens every
three to five years but not necessarily
spaced out like that right sometimes you
have a tech bubble and then 911 and
you’re going geez I just went down 40
whatever percent I recovered I’ll get
hit again 40 something per so I’m just
not doing this anymore
well that’s obviously a spectacular
mistake because we know what’s happened
since then the markets up 10,000 plus
points same thing with Oh 809 if you
look at March 9 of 2009 the market
bottomed firm then it was up 65 percent
over the next few months when it turns
it turns very rapidly so I think I think
part of it is this that they’re not the
bear markets don’t space themselves out
sometimes they come so fast they freak
people out
sometimes five years passes and like
right now many of my clients some of my
clients will say well we’re due for a
bear market well doesn’t work like that
there have been periods in history oh 10
or 15 years we just don’t know what’s
going to happen is it gonna be terrorism
is it gonna be an industry bubble is it
something we’re not we’re not thinking
about that’s gonna drive those those
things but regardless the economy is
resilient people have this perception
that capitalism is fragile and the
economy is fragile and it’s in fact it’s
it’s quite the opposite and and the
market is a function of dividends which
we get paid in bear markets still it’s a
function a little bit of inflation and
then of over time rising profits and so
what’s happened in every single bear
market in history is those things have
prevailed and the markets gone on to a
new high so let’s say you’re the worst
investor in the world you put all your
money in the market the day before the
crashing in late oh seven that starts in
late oh seven you put all your money in
before 9/11 or the tech bubble well we
were talking about the average bear
market being 33% these happen to be
three of the worst bear markets of all
time and they’re fresh on everyone’s
minds
if you put all your money a hundred
percent in stocks then well today your
infinitely wealthier right so it’s that
hard to screw up if you’re educated you
have the discipline and you take
advantage of lovers you get in the game
and stay in the game that’s the biggest
challenge for people of course that’s
right and I think that that brings us to
a fact that I think is incredibly
important and that people really don’t
realize or appreciate or just plain
forget your freedom fact number seven
the greatest danger is actually being
out of the market now this is totally
counterintuitive right cuz everybody
says look the ideal would be you get in
at the right time and go up and then you
get out before it goes down but you know
no one’s ever been able to predict that
of the best of the best of the world but
here’s the fact that’ll blow your mind
JP Morgan did a study and swab both
independently did studies over 20-year
periods of time so in 1996 the 2015 and
they found it on average if you and the
sp500 you have an eight point two
percent return which compounding over
time is extraordinary for people helps
you get to that wealth but in those
twenty years if you just missed the ten
best trading days ten days out of twenty
years and your return would be four
point five percent it would literally
almost be cut in half just by missing
those two days how are you gonna know in
twenty years which of those ten days are
give me other statistics of what happens
with what what do you days I think one
of the big misperceptions is okay the if
the markets at ten thousand like it was
a few years ago and I wait well what
what what are their only three things
that can happen if I’m in cash one is
the market goes down
I feel great but am I gonna go in at
nine thousand do I really feel great
about the market at nine thousand I
didn’t feel good at ten I still have not
met that investor in my you know long
career second it goes sideways I lose
dividends are better than being in cash
or a CD third it goes up now the problem
with it going up is it might not come
back to ten thousand it might do exactly
what it did go to eleven twelve thirteen
fifteen nineteen nine you know you lost
Rob you’ve lost your opportunity now if
I go in there’s three things that can
happen it goes up I’m high-fiving
everyone around me it can go sideways
I’m better than cash it can go down big
deal I can buy more or I wait it out
that’s the worst thing in the world that
happens is I wait it out so being out
it’s like Tony says counter in two
being out is what results in permanent
loss being in the worst outcome that can
happen and it’s still a low probability
event is temporary loss of capital so
Peter isn’t it also true that those
advisers who are not fiduciaries who are
brokers they will make money whether
they’re encouraging you to buy or sell
so they actually have a disincentive to
advise you hey don’t do anything stay
the course you’re going to be fine I
think it’s when you’re in the brokerage
world you just don’t know how anyone’s
being compensated if they disclose it to
you usually there will be conflict
sometimes they get paid commissions so
there’s an incentive for activity
sometimes they get paid a fee but only
if you’re in certain asset classes so
there’s an incentive for you to be in
those asset classes sometimes they get
paid different fees and different asset
classes so there’s incentive for you to
take risks you might not want to take
and those incentives have nothing with
your best interest that’s just the
incentives of what makes the most money
for the corporation they might have
their own bond desk they might have
their own mutual funds they might have
their own hedge funds and so I think the
key is you want to have an advisor you
pay a fee and that fees the same on all
of the investment advice all of the time
and we you can get yourself to that
which I mean like Tony said at the top
of the of this that’s extremely rare
unfortunately in this profession but if
you can find somebody whose investment
fees the same no matter what they do
what out no matter what they recommend
that’s the best case scenario in terms
of at least having an alignment before
we even get to the next steps with
advisors and I want you know I give the
ten days below to give them the second
statistic they found in those twenty
years if you have a market 20 days the
20 best days you’re eight point two
drops the two point one you might have
had your money in a Treasury or
something of that nature right and if
you missed the top 30 days in 20 years
you lost money and so how are you ever
going to time that and then the best
fact that we found was extraordinary and
this was done by JP Morgan
they found that six of the ten biggest
trading days upsides were within two
weeks of the 10 worst trading days so
it’s like when people’s got surfing
ripped open that’s when the greatest
explosion of opportunity happens we wrap
how far now Peter I don’t seems latest
statistics from where we were in 2009
how much was the growth bit on the
market have forgotten I mean I’m looking
at the Dow under 7,000 now near 20,000
so several hundred percent with
dividends and look at all these people
that are sat out because they
afraid the markets going up and down
where’s where’s the money gonna go with
the market can’t last this long every
story that you hear and what really
kills me is I guess it’s two extremes
its Millennials because they’re just not
in the market right they’ve been there
like the generation that went through
the Great Depression they saw what
happened to their families and to their
parents and some of them to themselves
that they’re the leading edge to that
and they’re just staying out of the
market and they’re the core years where
they could with a very small amount of
money become financially free because
the power of compounding with time and
then you got baby boomers that have been
sitting out they can’t afford to set out
at this time but they don’t know how to
get a plan together that can protect
them in the worst situation so they
don’t have to be fearful and they don’t
know how to take advantage of it that’s
what I’m shakin bowls really teaching
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