MONEY Master the Game: 7 Simple Steps to Financial Freedom (74 page)
Read MONEY Master the Game: 7 Simple Steps to Financial Freedom Online
Authors: Tony Robbins
And then I ask, “Okay, all you know is what you see right here. How many people want to be long and stay long on this chart?” And about 60% will raise their hands, yes. And how many want to get off this investment and sell it? Then 40% or so will say get out. And I say, | |
TR: | That’s great, makes total sense. In fact, you say some of your greatest victories have been turning points, right? That’s what’s been different about you. |
PTJ: | Right, the crash of 1987. I made my money on the day of the crash. |
TR: | Okay, you have to tell me about that. |
PTJ: | You got it. It had gone under the 200-day moving target. At the very top of the crash, I was flat. |
TR: | So you waited until it turned? |
PTJ: | Yes, absolutely. |
TR: | That’s amazing! I’m blown away by that one. So you don’t consider yourself to be a risk taker, and you focus on how to protect constantly and how to align with the trend. What’s the second thought for students? |
PTJ: | Five to one. |
TR: | Asymmetric risk/reward? |
PTJ: | Exactly. |
TR: | And Paul, you are not wrong 80% of the time! Since asset allocation is so important, let me ask you: If you couldn’t pass on any of your money to your kids but only a specific portfolio and a set of principles to guide them, what would it be? I’m asking this to help people get a model of how the average person can look at investing through your eyes. |
PTJ: | I get very nervous about the retail investor, the average investor, because it’s really, really hard. If this was easy, if there was one formula, one way to do it, we’d all be zillionaires. One principle for sure would be get out of anything that falls below the 200-day moving average. Investing with a five-to-one focus and discipline would be another. But here’s what I do know. You’ve got to go interview Ray Dalio. He knows better than anybody. If you’re looking for asset allocation, he’s the one guy who does it better than anybody. |
TR: | He’s next on my list, thanks! Okay, let’s shift gears. You’ve had this phenomenal success in your life, you’re legendary, and you’re so humble about it. Tell me about giving back: What’s driven all of the amazing philanthropic work that you do? What continues to drive you to make a difference in so many people’s lives? |
PTJ: | As a young child, I’d gone to this huge outdoor vegetable market in Memphis, and I remember all of a sudden looking up, and my mommy was gone. And when you’re four years old, your mother is everything. And this extraordinarily kind, very old, very tall black man came over and said, “Don’t worry. We’re going to find your mama. Don’t cry, we’re going to find her. You’re going to be happy in a minute.” He took my hand and walked me down those roads until, finally, he saw my mother, and she started laughing because she could see I was crying. |
TR: | Wow. |
PTJ: | You never forget stuff like that. God’s every action, those little actions become so much bigger, and then they become multiplicative. |
TR: | That’s so beautiful, Paul; I see and feel the depth of impact of that moment on your life even now. You got us both on the edge of tears. Thank you. Last question for you: most people have an illusion that if they have enough money, stress goes away. Is it true? Does financial stress ever go away? |
PTJ: | That day still has not come. |
TR: | Okay. That’s what I wanted to hear. |
PTJ: | The problem is, like anything, it’s never enough. Financial stress right now for me is that there are so many causes that I believe in. My financial stress relates to being able to give to the things that make me happy, that create passion in my life, and that are really exciting. There’s a huge conservation project that I’ve just discovered about a month ago that I probably can’t afford. The time frame on this is 100 years, at least. And I’m thinking, “Oh my God! If I went and bought this timber operation, and let that land heal, and restored it. One hundred years from that day—it’s going to be one of the most breathtakingly beautiful places! This is where God would have spoken to Adam; it has to be the Garden of Eden.” And I’m thinking, |
TR: | Thank you, Paul. I love you, brother. |
CHAPTER 6.6
RAY DALIO: A MAN FOR ALL SEASONS
Founder and Co-Chief Investment Officer, Bridgewater Associates
Ray Dalio has been part of the DNA of this book from the moment I first sat down to interview him at his Connecticut home. Our initial meeting went on for nearly three hours of pitching and catching ideas about everything from the benefits of meditation (“It gives me equanimity,” said Ray) to the workings of the economy (“It’s a simple machine”). I already knew the astounding track record of his $160 billion hedge fund, Bridgewater Associates, the biggest in the world. I knew that Ray manages risk better than anyone else on the planet, and that he’s the go-to guy for world leaders and huge financial institutions when they need a safe harbor in the volatile marketplace. But I had no idea that when I asked him the same question that I asked every financial superstar in this book—What portfolio would you leave your children if you couldn’t leave them money?—that Ray’s answer would turn out to be the Holy Grail I was seeking when I first began this quest. What was it? Nothing less than an investment plan for individual investors like you to grow your nest egg, and one that would work in all seasons and without risking your life savings. Until now, only Ray Dalio’s clients had access to his magic formula for investing success in every season. His generosity in choosing this time and place for sharing it with the world leaves me astonished and grateful.
I don’t need to go into Ray’s background here. You’ve been on this journey with him from the first pages of this book, and if you’ve gotten this far, you’ve already read chapters 5.1 and 5.2, “Invincible, Unsinkable, Unconquerable: The All Seasons Strategy” and “It’s Time to Thrive: Storm-Proof Returns and Unrivaled Results,” which tell his story and lay out the basis for his entire portfolio. I was going to list it here, but it’s not as powerful without the context. If you jumped ahead, don’t cheat! Go back and read those chapters. They will blow your mind and change your life! If you’ve read them already, it’s time to implement. Ray Dalio is the master of All Seasons.
CHAPTER 6.7
MARY CALLAHAN ERDOES: THE TRILLION-DOLLAR WOMAN
CEO, J.P. Morgan Asset Management Division
Mary Callahan Erdoes may only be five foot two, but she casts a long shadow as CEO of one of the largest asset management groups in the world, at the biggest bank in the United States.
Forbes
magazine has called her “the rare female comet in the male-dominated firmament of Wall Street” and listed her among the 100 Most Powerful Women in the World. Since 2009, when she took over J.P. Morgan’s Asset Management Division, it’s grown by
more than half-a-trillion-with-a-T
dollars—more than a 30%
increase! Today Erdoes oversees the management of $2.5 trillion invested by foundations, central banks, pension funds, and some of the world’s wealthiest individuals. She’s often mentioned in the media as being on the short list to succeed JPMorgan Chase CEO Jamie Dimon.
While most of the voices in this book advocate that passive, low-fee money management brings the best results for individual investors over time, Erdoes makes a case that funds that are actively managed by the best minds in the business are worth the fees they charge. She says the proof is in the loyalty of their satisfied clients, as well as the new business they continue to attract.
Money management is in Erdoes’s blood. She was the firstborn child and only girl in a large Irish Catholic family in Winnetka, Illinois. Her father, Patrick Callahan, was an investment banker with Lazard Freres in Chicago. Mary excelled at math in high school—while also winning equestrian medals—and went on to become the only female math major in her class at Georgetown University. She met her husband, Philip Erdoes, while they were both earning MBAs at Harvard Business School.
As a financial services executive, Erdoes has broken the mold in more ways than one: in a business famous for aggressive management, her colleagues describe her style with words such as “loyal,” “team-oriented,” and “caring.” When she was coming up at J.P. Morgan, she was known for flying across the country to meet with clients who needed extra help in managing their assets. Now 47 years old and part of the highest level of management in a firm with 260,000 employees, she is honored as much for her extraordinary leadership as for her financial brilliance.
Our meeting took place at J.P. Morgan’s world headquarters in the classic Union Carbide Building, overlooking Park Avenue and the skyscrapers of Manhattan. As I rode the elevator to the conference room, J.P. Morgan Asset Management’s communications director, Darin Oduyoye, told me a story that touched me deeply, and illustrated the kind of person I was about to meet. Oduyoye had always wanted to be a broadcaster but took a job in J.P. Morgan’s mutual fund division before transferring to public relations. When Erdoes asked him to be a producer of a daily morning meeting broadcast for wealth management employees all over the world, he was shocked.
