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Tim @ 0:24

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Why hello there, my dear little munchkins! This is Tim Ferriss. I’ve had some caffeine since you last heard from me. What you’re about to hear is part 2 of a multi-part conversation with Tony Robbins. To put it briefly, Tony Robbins is a performance strategist with clients including presidents like Bill Clinton, Mother Theresa - not making this up - Andre Agassi, Leonardo DiCaprio, and Oprah Winfrey, who calls him “superhuman.” This guy is a force of nature. If you didn’t catch the first part, you might want to do that before venturing in; but, really, we jump around a lot, cover a lot of different topics. If you don’t mind your stories more of a jigsaw puzzle, then by all means keep on listening from this point on.

This episode is bought to you by 99designs.com, the largest marketplace of graphic designers in the world. Here’s how it works: you go to 99designs.com - I suggest 99designs.com/tim for reasons I’ll explain - and whether you need to create a logo, a website, a car wrap, a bumper sticker, a t-shirt, whatever it might be: you can put up what you need, a description, then designers around the world compete for your business by submitting ideas and designs and so on and in less than a week, you have an original design that you love, or you get all your money back. I’ve used 99designs for years, including for some very big projects like the book cover - or at least brainstorming book cover ideas for the four hour body, which went on to become a #1 new york times bestseller; it’s in a dozen plus languages and has sold a gajillion copies. I have used it when time and money has been of the essence; it is a fantastic tool and if you go to 99designs.com/tim, you can actually see some of the campaigns, some of the competitions that I’ve run: actual submissions for the book covers and things like that. You can also get a 99-dollar upgrade for free, which gets you more submissions. So check it out, 99designs.com/tim.

And now without further ado, please enjoy part 2 - the final part - of the tim ferriss show with Tony Robbins.

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Tim @ 2:47

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And to touch on a few things that you mentioned - for those people asking themselves, as I’m sure a lot of people would: “How can I apply what these guys do to what I do?” I think that you present a number of observations articulated very, very well that most people will never be exposed to. 

For instance: #1 - asset allocation does not mean choosing if you are going to be a stockpicker or invest in an index fund for the S&P 500, because you’re in one bucket, right?

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Tony @ 3:17

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That’s right!

Tim Ferriss speaker headshot

Tim @ 3:19

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You’re in a correlated class.

Tony Robbins speaker headshot

Tony @ 3:20

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There’s no diversification in that.

Tim Ferriss speaker headshot

Tim @ 3:21

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Right. There’s more to it..

Tony Robbins speaker headshot

Tony @ 3:22

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Well, there’s some, maybe in more companies, but it’s all within the same asset class.

Tim Ferriss speaker headshot

Tim @ 3:26

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Yeah. And the other thing is that: there are ways to look at the problem, uh, that are not obvious right off the bat. For instance, you mentioned something that’s so simple, but a lot of people miss: If you invest and you lose 50%, you have to now have a 100% gain to get back to break-even. Put another way - this is also straight from the book - let’s just say, I think it was investing over either five or ten years, the exact number is in the book - you’d invested in the stock market through a - let’s just call it an off-the-shelf mutual fund that charges typical fees.

Tony Robbins speaker headshot

Tony @ 4:07

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Yeah.

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Tim @ 4:07

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And the market moves up and down, up and down, up and down. At the end of the period of time, you’re back at the same market levels…

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Tony @ 4:13

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Yes.

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Tim @ 4:14

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You would think if you put in $100 grand, you’d have $100 grand at that period of time. And it ends up, you’re 47% down.

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Tony @ 4:22

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It’s the idea of average rates of return. If a lot of people look at what they’ve invested, their broker or whoever represents them will show them the portfolio and go: “Look, you started here, you went up 50%, you went down 50%, but you went 50%, you went down 50%” Your average rate of return is zero. But when you put real dollars in there, $100 thousand and you go up 50 - it’s 150. You go down 50 - it’s 75. You go up 50, oops! Then you go down and you end up at $37 thousand instead of $100 thousand! Your principal’s moving up and down. The biggest lie - in the book, I walk you through these seven steps. One of those steps is, frankly, you’ve got to do what most of us, probably the people listening on your team already do: You gotta become investor: you gotta become an owner, not a consumer. The way to do that - frankly, we all know, but very few people do - you take a percentage, you lock it down. You never see it, it’s automated. You put it aside for investment and that just occurs.

I’ve showed people some of the tools that Nobel prize winners have come up with so if you say: “I have no money.” You can invest more for tomorrow by committing when you get a raise or your company gets to the next level, you automatically have that percentage go there. It’s money you’ve never seen, it’s not taking money away from you, so you’re willing to commit to it, right?

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Tim @ 5:35

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And there are ways to automate that.

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Tony @ 5:36

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Yeah, totally automate it. It’s just fantastic. They took a group of blue collar workers who couldn’t save more than 3% and they showed in twelve years, they had them up to 16% with absolutely no sense of loss. They show this with an example: If you give a monkey an apple, they go crazy. If you give them two apples, they go crazy. If you take one of the two apples back, they’re angry as hell. They still have the same first apple; what happens is if you don’t give them that second apple, but it gets invested for them, that changes your world; you don’t feel a sense of loss, there’s no drop. And yet, you set yourself up saving 15, 16, 17% A totally different world than three or nothing, obviously.

The second piece I brought this up for is: it’s great to get in the game but, oh my God, don’t get in the game ‘till you understand the rules, ‘till you’re an Insider. So I go through the nine biggest lies: they’re investment lies, they’re Wall Street lies, however you wanna call them, but they’re marketed lies. There’s a reason you believe them.

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Tim @ 6:30

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Very heavily-marketed lies.

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Tony @ 6:31

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Very heavily-marketed, to the advantage, right? One of those is this idea that they’re gonna beat the market! Here’s the real facts: 96% of all mutual funds in a 10-year period will never even match the market. You’re paying a premium: you could’ve owned an index that cost you 20 basis points at Vanguard. Instead, you’re paying - they say - 1%. You’re asked by people: “Oh, it’s just one percent?” In reality, Forbes has shown: the average mutual fund, when you put all fees in, if you read the prospectus, there’s all these “21-b, trading fees” - all these things they don’t call fees, but they’re money out of your pocket. The average is 3.1 percent.

When you do that, here’s the problem:

Number one: only four percent - what’s your chance of picking the four percent of mutual that are gonna succeed? If you go for Morningstar, you’re screwed. I can show you, statistically, Morningstar’s own statistics has shown the ten year period, of 250 people that made it to 5-star Morningstar, 4 are left. Doesn’t work that way. If you could pick the four percent - if you were magically able to do that - you could do alright, but the four percent’s always changing. Your chances of picking the right mutual fund are 96% against you. The average person’s 401(k), they don’t know how to evaluate this. They try and pick it, so they’re screwed. And then you get poor performance and you pay somewhere between ten and thirty times more for the same investment you could’ve got for ten to thirty times less. It’s like the ultimate insult to injury, and you go: “What, does that matter?”

First, let me give you this so people understand what 96% means, or getting a 4% possible success rate. If you and I play Blackjack - most people know how to play, right - twenty-one. You get two face cards, that’s worth twenty points. If your inner idiot says: “Hit me!” You’ve got face cards, you’re going to twenty-one - you have an eight percent chance of success. You have a greater chance of success there than if you were trying to find the right mutual fund. Now, what’s your chance of success in getting financially free when - here’s what’s unbelievable. If I said to you: “Here’s an investment I want you try, Tim. Here’s how it works: You put up all the money. You put up all the risk. And I will put up no money and I will put up no risk. If you win, I get up to 60% of your entire growth of what you have over the lifetime of your investing.”

You put up all the money, I take no risks, I put no money in. And if you lose, you lose but I don’t lose anything. That’s a deal that most people say: “I’d never take in a million years.” That’s the average mutual fund. For every 1% you pay, it’s 20% over the lifetime of your investments. Just like there’s compounded growth, there’s compounded fees.

Tim Ferriss speaker headshot

Tim @ 9:07

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Right.

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Tony @ 9:07

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So Bogle showed me: 60%! And I’m saying: “Jack, how is this possible? How could people be doing this?” He goes: “Tony, it’s the $13 trillion lie, and it’s called one thing: Marketing.”

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Tim @ 9:15

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Yeah.

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Tony @ 9:16

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Marketing! He said: “I’ve been in the business 64 years; it makes me crazy, and people still do it - the vast majority of people put their money in a mutual fund.” Now, he’s come to be the largest mutual fund in the world with an index fund: $2.5 trillion. Most of the smart money is in there; it’s not the average person’s money that’s in the index, today. I go through these lies and what you don’t know in the financial world will hurt you. The one you’re talking about is just the average rate of return: you wanna be seduced. When you look at the rate of return, Bogle said to me: “Tony, whatever you see, what the rate of return was, you’re trying to evaluate that mutual fund based on its past performance, just know that number’s not accurate.” Dalbar did an incredible study, 20-year study. They found the average mutual fund owner, over a 20-year period of time made 2.5% net. The market was 9.7%. That oughta give you a sense.

I went to go do this book, I won’t mention the person’s name; I got all these incredible endorsements from everybody: Nobel Prize winners, self-made billionaires, all these guys. There’s a particular person, a really good friend, and I won’t mention his name. It was ironic: he wrote me back and said: “Well, my team’s read it and they really don’t think it’s that special.” Well, I’m not insulted by that, but it doesn’t make sense to me. This person has six mutual funds.

Tim Ferriss speaker headshot

Tim @ 10:30

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[Laughs]

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Tony @ 10:31

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[Laughs] It’s like: okay, I get it, dude.

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Tim @ 10:32

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Don’t ask a barber if you need a haircut!

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Tony @ 10:34

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It’s my fault!

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Tim @ 10:35

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Yeah! [Laughs] “Sorry about that one!”

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Tony @ 10:36

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I shouldn’t have asked that question! I shouldn’t have told him.

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Tim @ 10:39

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I should point out to folks also, that some people are very math-phobic. Part of the reason I went to Princeton - it was funny, I was reading Carl Icahn’s story and how he was told he would never get into any Ivy League schools.

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Tony @ 10:54

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Yes. Yes.

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Tim @ 10:55

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And he chose Princeton. Same thing happened to me: I was told I would never get in..

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Tony @ 10:58

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Wow!

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Tim @ 10:59

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…to a whole host of schools, because - and this is kind of like your mutual fund guy - humans respond to incentives.

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Tony @ 11:04

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Yes.

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Tim @ 11:05

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And this particular guidance counselor is incentivised for what? To optimize, to be able to say: “X% of students got into their first choice school.” How do you do that most easily?

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Tony @ 11:15

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Lower their expectations.

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Tim @ 11:16

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Lower their expectations. But I am intrinsically not someone with a lot of math background. Part of the reason I chose Princeton over other schools is because they didn’t have a math requirement. And I think for a lot of people listening they may be like: “Oh my God. Percentages and Compounding. It’s very overwhelming!” I think part of the reason your book had to be as long as it is - and a book should be as long as it needs to be - is that if you were to try to compress into 100 pages, it would be like watching a 3-hour action movie but getting a frame every five minutes.

Tony Robbins speaker headshot

Tony @ 11:47

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Yeah

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Tim @ 11:48

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You wouldn’t - it would be too much in too little space. but when people read the book, when I read the book, you’re leading people in a logical progression from building block to building block to building block so that by the end, people are very, very savvy. And so people who might be thinking: “Oh my God! This is really a lot for me to absorb!”

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Tony @ 12:07

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I probably talk at 100 miles an hour. In the book, I’m telling you stories too.  I think the stories take it away so it’s not numbers; you go: “Holy shit. If me and three of my friends all put aside the same amount of money and we both get a 7% return, but my buddy’s getting fees of 3%, my other buddy’s 2, and I’m 1, and all three just put in a million bucks or a hundred thousand in, the person with 3% in fees ends up with 65% less money.”

They got the same rate of return, they start the same amount of money over the same period of time. I think when you see that with real people’s lives, you start to go: “I don’t have to know the math; I just know one thing: Fees Matter. And I’m gonna cut those babies to the absolute base.”

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Tim @ 12:48

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Definitely. And I’d love to talk, you brought it up a little earlier. Uh, Ray Dalio and asset allocation, ‘cause this is something I’ve been thinking about a lot, considering that, uh, due to paper gains, I’d say I have a very, very, very, very high double digits of my entire net worth in tech. Uh, and, it’s hard - unfortunately - to rebalance when you have a lot of private stock that can’t be traded! [Laughs]

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Tony @ 13:10

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Yeah, of course. Been there.

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Tim @ 13:12

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Uh, but [Laughs] you know how it is. But Dalio’s someone I’ve been fascinated by for so long; uh, maybe you could talk about the All Seasons and some of the stuff that you chatted with him about as it relates to Asset Allocation.

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Tony @ 13:27

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It might be helpful for people to take a second and give people his background. Ray’s not the guy you would think of as master of the universe; he comes from Queens, his dad was a jazz musician, his mom was a homemaker, really lovely lady. He went from, you know, very low middle class family and decided that he wanted to go work at a golf course. He bumped into, you know, one of the things I talk about is: Proximity affects your life, who you’re in proximity with. And he’s in proximity with very wealthy people, they’re talking about stocks, and he got fascinated by it and got hooked on the process and got involved in the stock business. But he got involved in a time period when the world was incredibly volatile in the 1970’s; we’re all shaped by our time periods, right? So if you can imagine, you know, that’s the time we had this massive inflation, where Nixon goes on television and says: “We’re going off the gold standard” - money as you know it called the U.S. Dollar, we’re not gonna back up with anything. He thought for sure the markets would just be destroyed. The American Dollar’s gonna be worthless. And then they had what was called the Nixon Rally. It shook him to his core: that as much as you think you know, you don’t know. It gave him a lifelong focus that says I always wanna be asking: “What do I not know? How do I understand the system as a whole, not just my perspective on the system?” So he started Bridgewater, in fact, my friend Paul Tudor Jones gave him some of his initial capital to do this and is wishing he didn’t loan it to him but would’ve kept it as an investment, I think, at this stage.

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Tim @ 14:47

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[Laughs]

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Tony @ 14:48

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Because Bridgewater became so gigantic. But what happened was: he’s the guy the U.S. Government went to when they’re trying to figure out how to design T.I.P.S. He’s the guy that when McDonald’s is trying to come out with McNuggets, and they’re trying to figure out: “How can we make sure we have enough supply of chicken?” He’s the one that figured out the math of futures and what to do so McDonald’s could even do that. That’s the way this man’s brain works. Over the years, he built this Alpha fund and it’s very intensive, and he’s lost money three times in 23 years. And the fund has returned 21% compounded for 23 years, just mind-boggling - before fees. And then [Ray] turned around and after all these years, said… Everybody talks about, you know, different stage of your life, you wanna protect yourself, so you do a balanced portfolio: 50-60% in stocks, maybe. 40-50% in bonds. When the stocks are more volatile, the bonds are gonna balance you out. He says: “Didn’t look that way in 2000, it all went down in 2008.”

Over the years, he said: “This is a story everybody buys but it’s not reality.” He began to pursue, he said: “What if I wasn’t around? I need an almost-passive form of investment, something that wouldn’t take 1500 people, that my kids could use, that would support all my philanthropic efforts if I wasn’t here.” He questioned everything about asset allocation that everybody’s ever been taught and came up with a different way of looking at it where he basically said: “There are four things that move the price of any investment: Inflation/Deflation, and whether the economy is growing or shrinking.” That creates four different seasons, in which - every type of investment: stocks, commodities, gold, real estate - has an ideal environment in which it grows and environments in which it will absolutely slam. He figured out: what’s the right combination of these things so that I can reduce the risk to the lowest level of loss possible. Warren Buffett’s rules, everybody talks about the rule, right? It isn’t Warren Buffett’s rule; it actually comes from his teacher. Rule # 1 to investing: don’t lose money; Rule # 2: See Rule #1.

So how do I make that happen, but also maximize the amount of upside: as much upside as possible? He called it his all-weather fund, ‘cause it works in all weather, and he did all his own investing in it for ten years, and he back-tested it all the way to 1925 and said: “Oh my God; I have discovered something unbelievable.” The only people who got to use this is: himself and finally his clients, the $5 billion net worth, the governments and pension funds. I’ve read about it and Ray does very few interviews, as I’m sure you know; if you’re online, you won’t find a whole lot, you know? In front of Congress, maybe in Davos every now and then; he kind of avoids any publicity and so forth.

I did all my homework on him: Paul Tudor’s one of his dearest friends, arranged to go see him, studied all out. I was prepared and I go into this meeting, and I started to ask him, I asked him I ask everybody: If you couldn’t pass on any of your money to your children - none - all you could pass on was a set of principles, an investment strategy, and a portfolio, what would it be? For your kids - they don’t have your skill. Everybody gave me different answers. His answer was: “Well, it would be my all-weather approach.” So: “Explain to me how it works.” He explained it - just like me telling it to you, real fast, people are going: “I don’t have a clue what he just said. It seems logical.” The one thing he said is: “Tony, when people think they’ve got a balanced portfolio - stocks are three times more volatile than bonds - so when you’re 50/50, you’re really 90/10.”

Tim Ferriss speaker headshot

Tim @ 18:15

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Yeah.

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Tony @ 18:16

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You really are massively at risk. That’s why when the markets go down, you get eaten alive. So he has this portfolio and he describes its principles. I said: “You know what, Ray? This is spectacular, I understand it. The only way you really get the result from this is if you knew the exact percentages.” If you’ve got somebody’s recipe and you put in a gallon when they put in a teaspoon of a particular ingredient, you messed up. So I said: “I need the secret sauce!”

Tim Ferriss speaker headshot

Tim @ 18:41

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Yeah.

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Tony @ 18:42

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And he looks at me and laughs and goes: “Tony, that’s my business.” That’s when he gave me the whole $5 billion net worth, and, you know, gotta have $100 million.

I said: “Yeah, Ray, but you just gotta tell me; you haven’t taken anybody’s money for 10 years, and you’re not gonna take anybody’s money!”

He goes: “Yeah, but it’s really complex.”

And I said: “I know it is! But give me a simple version.”

And he said: “No, it’s always changing.”

I said: “Give me a version with no leverage that the average person can do. You just gotta tell me, they go to their broker, their wealth manager, their mutual fund’s not gonna work. So help the little guy out! I know you care!”

I started teasing him, I said: “Come on! Give me the juice!”

He started laughing, and he said: “Well, I could give you something - wouldn’t be perfect.”

I said: “I don’t want perfect; your worst design will be the best design anybody else will ever come up with.”

He said: “Well, we might do…” And he lays out this simple strategy…

Tim Ferriss speaker headshot

Tim @ 19:24

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Mm-hmm.

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Tony @ 19:24

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And I was vibrating._I was like _vibrating. I knew what his generosity level was; it was unbelievable. He’s never revealed it to anyone in history. And I ran as fast as I could, I got in the helicopter, flew back, went to the guys at Hightower. I went to the guys at two other firms and I said: “I want you to run these numbers. Show me the modern period - the last thirty years. What really happened with this formula? Every single year for thirty years, what’s the overall for the thirty years?” I look at thirty years - 1984 - that’s when we finally had cellphones, even, right? That’s when the world started to shift. Show me forty years and show me seventy-five years. Take me back right before the Depression, even. And the guy texted me in the middle of the night - he never texts me - and he says: “Have you seen the numbers?” I’ll never forget: I get up and call him on the phone and said: “What? No, I haven’t seen them.” He e-mails them to me. And Ray was right, 85-86% of the time, every time period we looked at between 85 and 86, 30 years, 40 years, 75 years. By the way, that’s being liberal ‘cause the 15% where he lost money, the most he ever lost is 3.95 per cent in seventy-five years. And that was 2008 when the market was down 51% peak to trough. The average loss including that was 1.9%. For example, one of his losses is .03; really, it was break-even, but we called it a loss ‘cause technically, it’s a loss. If you could go to Vegas and you knew that for 75 years, the strategy you used had been successful 85% of the time and that when you lost, the most you lost was 1.9 percent, how much would you bet, how long would you continue to gamble on this - it’s not hard to figure it out! I mismatched, I took it to some very large institutions and they’re like: “I’ve never seen anything like this!” So a couple people said to me: “Don’t put this in the book; this is a business, man! This’ll give you the lowest level of volatility, the highest level of return, it averages just under 10% return with that level of volatility; it’s mind-boggling!” I said: “You know what, that’s not the spirit it was shared in. We can do this for people, if they wanna do it, we can give that option. But I’m putting it in the book so anybody can do it.” And it’s in the book! And, you know, it’s not the only one! There’s strategies for everybody, but it’s one of the more exciting ones you’ll see.” 

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Tim @ 21:38

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Is there anything - totally up to you - but just, is there anything you can share from what he told you about the All-Weather?

Tony Robbins speaker headshot

Tony @ 21:46

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Well, the.. I don’t..

Tim Ferriss speaker headshot

Tim @ 21:46

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And I will just say as a preface, there’s so much in this book. Number 1: I’ve had also people say to me, for instance - I’m not gonna name any of my close friends - “Yeah, Four Hour Body, blah blah blah, it’s fine; give me the index card.” I give them the index card and there’s context missing - 

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Tony @ 22:01

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Exactly!

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Tim @ 22:02

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And it’s not just because they can’t in some cases, do it, because they’re missing the detail and they won’t do it. Get the book, do yourself a favor.

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Tony @ 22:10

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I’m not holding back; the reason I wouldn’t share that is because it would be out of context. Even in the book, I tell people in the first chapter; I tell them this result, I give them one example. I said: “I know the first thing you wanna do is turn to that section of the book, and you can do it; but I caution you - there’s a syntax, there’s a sequence.” The dog bit Johnny, Johnny bit the dog - and if you will go through this sequence, it’s gonna mean more. If you know that portfolio, but you don’t know, truthfully, what your risk tolerance is? You don’t know truly what your personal goals are, you don’t know what you need to avoid in the fee structure and the tax structure? That return won’t be very great for you! More importantly, you won’t go through the psychology that’ll make you actually follow through for a while. But if people wanna do it, by the way.. I then went to, uh, Hightower, which is the fifth-largest registered investment advisory in the United States: $30 billion in assets, 13th fastest-growing, Inc Magazine company, fastest growing company: amazing. Elliot (Weissbluth) the CEO, blown away by this man; they do an interview with him and I left, they’re going: “This man is committed to total transparency. This man blows out all those fees, all those..” - to say it in the nicest way possible - “..screwing over that happens to most clients. He eliminates that.” He’s a former litigator, he’s got a moral code that’s pretty intense; I loved him. I came back and I call him up and I said: “Let’s meet again.” When we met again, I said: “I got a challenge for you; how about you do this for everybody else?” He said: “What are you talking about?” I said: “How about for the average man that really needs it? He said: “What are you talking about?” I said: “Bring that ultra-wealthy advice to them. Show them on a small scale how they can do what your ultra-wealthy client does.” He goes: “Tony, you can’t make money doing this.” I say: “You don’t need to make money doing it! I’m doing a book, I’m not making money to do it! A part of our life has to be for something more. I know that’s what you’re about; I’m not taking it up, putting your business at risk. Let’s use technology. Technology with live people: the balance.”

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Tim @ 23:50

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Mm-hmm.

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Tony @ 23:51

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And so we built, together, a site, I put them together with this group called Stronghold, which is brilliant; they’ve been managing my money for me for, uh, seven years. Ajay Gupta, he’s actually the person that Charles Schwab put on the cover of Most Magazine as kind of the face of the 10,000 registered investment adviser fiduciaries around the world and around the country. And the two of them got together, created a site - it’s kind of like “Check your Broker.” So now, you can go online, and you can put in all your accounts, it’ll aggregate them - it’s a patented technology - you get to see.. A: What your real costs are and everything, all in one picture, so there’s no B.S. first is what you could have the same investments for-

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Tim @ 24:27

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Right.

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Tony @ 24:27

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Right? It’s like: “Why would I pay more?” Second thing it does is it shows you what your real returns have been - combined - versus what you think they are. And third, it shows you what your volatility levels have been, the amount of risk you’re taking, so you know. And then fourthly, it does a comparison to that versus other portfolios including the one designed by Ray Dalio. You can go: “Wow, I wanna do this!” If you’re a person like half the U.S. - less than $25,000 investable assets - you get to do the whole thing for free. It’s given to you, you go do it. If you are not, you have more, you can still do it for free: you can do it yourself. Or you push a button and say: “I’d like you to become my registered investment adviser.” And somebody can do it. So I remembered saying: “Most of the people you’re never gonna see anything from, but wealthy people started not wealthy.” Right?

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Tim @ 25:04

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Right.

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And so, it’s really cool; it’s one of those few - as corny as it sounds - win-wins. Right, these guys are adding value, I got them to do it, and now they’re proud of it - they’re excited. So it’s, it’s a cool thing. So-

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Tim @ 25:14

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What is the URL?

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Tony @ 25:16

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Uh, the URL is, uh… what is it… strongholdfinancial.com - I gotta double-check, but I’m pretty sure.

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Tim @ 25:21

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Okay; we’ll double-check that and it’ll also go in the show notes, guys.

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Tony @ 25:23

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You got it.

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Tim @ 25:24

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Uh, you were saying, to answer my question. I didn’t wanna cut you off…

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Tony @ 25:28

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Oh. Which one? Sorry

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[Laughing] We have a lot of questions. 

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Tony @ 25:31

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Which one? [Laughs]

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Tim @ 25:32

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Uh, you know what? Let me highlight a couple..

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Oh, yeah let me answer. I said: “I don’t wanna come here because even in the book, I don’t do it until you get there; it won’t mean anything to you.” I’m not holding anything back, you can go to the bookstore, open it up and read it, not pay anything. I don’t give a shit. But I think you’d be doing yourself a disservice; what you really wanna do is take yourself through the process so that when you get to that point, you can decide: “Do I want that Dalio to be 20% of what I do? 5%? 10%? None? Fifty?” ‘Cause there are many different strategies in the book. Including, as you said, David Swensen. David Swensen is the most successful institutional investor of all time from Yale. He went from $1 billion, took their money from $1 billion to $23.9 billion. $24 billion, now, in two decades. He’s a rock star. Nicest human being you’ll ever meet in your life, and doesn’t get paid one-tenth of the rest of these guys; it’s his dedication to Yale is why he’s there. I mean, he could leave there and be in a totally different place. When he had cancer, the man said: “Listen: I’m not going anywhere, this is my bucket list, is to be here and continue to serve at Yale.” A man of such unbelievable integrity and he gave me his exact portfolio - it’s in the book also. He actually gets a higher return - to give you an idea - than Ray does, but you have to go through a hell of a lot more volatility, obviously. That’s why your risk, you see, you gotta know what your real-

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Tim @ 26:39

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Yeah.

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What you think your risk-reward is in your mindset versus what it really is. You’ll know when you go through the book.

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Tim @ 26:44

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If I can make a request..

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Tony @ 26:45

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Yes!

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I would love to you to interview the guy who hired Swensen for Yale, ‘cause talk of the best hire of all time!

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No kidding, no kidding.

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I mean, just the psychological profile of the guy is so unique.

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Yeah.

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Uh, so couple things I’d love to just underscore for folks. The first is - and again, this is pulling stuff from the book, I’m gonna paraphrase some it, but - I think it was Dalio who said something along the lines of: “Losers react, winners anticipate.” Uh..

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Tony @ 27:12

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That’s actually me, but that’s okay.

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It’s you!?

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I’ll give it to Ray Dalio! [Laughs]

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Tim @ 27:14

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You know what, take that as a compliment! [Laughs] But the point being that the, uh, and I guess Mark Twain quote is also in there, which is: “History doesn’t repeat itself, but it rhymes.”

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Tony @ 27:26

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Yeah.

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So there are going to be crashes; there are going to be black swan events. And you want to have a plan in place for when that happens.

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Tony @ 27:35

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Exactly right.

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Tim @ 27:36

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And the more you can automate your.. many of your financial decisions, you know: “Know when to hold ‘em, know when to fold ‘em.” And actually have a plan going in. So if you buy something and have no plan for selling it, you’re gonna be subject to sort of impulse reactions that will cause you to do what the vast majority of people do: they buy high and sell low. So what, what, is in this - what we’re talking about when we talk about asset allocation, among other things - just to sort of, uh, try to, try to distill it for people as a concept, is that you have uncorrelated or inversely correlated “buckets” so that if one portion of your investments goes down because of inflation, deflation, fill in the blank, there are others that go up which mitigate your risk.

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Tony @ 28:21

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That’s correct.

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And what you notice - and I live in Silicon Valley, I’m very involved with tech - that’s sort of been my sandbox for the last, uh, close to ten years, I guess. What you notice about the best - okay: 95% to talk about venture capital is very similar to mutual funds. The vast majority are horrible. As a class, they’re terrible.

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Tony @ 28:45

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Yeah.

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Tim @ 28:46

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However, if you pick the unicorns - and you use the same term..

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Tony @ 28:49

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Reid Hoffman or someone like that..

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Tim @ 28:51

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Yeah, yeah. There are a handful who were very very consistent. And so what I’ve tried to do, just like you did with a lot of these hedge fund managers is look at what separates them. And what separates them is you have the vast majority of tech investors who think high risk, high return. “I’ve gotta swing for the fences; I’ll be okay as long as a third of my startups lose money, a third break even, and a third make money.”

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Tony @ 29:17

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Wouldn’t it be nice if life worked that way? [Laughs]

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Tim @ 29:18

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Yeah! Doesn’t work that way! Whereas the guys who are really good realize that there’s a parallel distribution: one or two of their investments are going to make up for all of the losses. The very top of the top - even though they don’t talk about it publicly - if they have a lot of their personal money at play, have thought a lot about asset allocation. So they’re heavily invested in tech and it might have an IPO, blah blah blah. They have an entire basket of shorts on the NASDAQ..

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Tony @ 29:47

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Yes.

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Or whatever it might be so that, by the way, it’s not always high risk - high reward. If their tech goes to hell, they have enough money that is betting it’s gonna go to hell that they don’t lose a lot of money, if at all. Or maybe they even make money!

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Tony @ 29:59

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That’s absolutely true.

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Tim @ 30:01

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And, uh, so I think the, um..

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Tony @ 30:03

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A way of doing it that you’ve mentioned. I think your brain may have been going in this direction - maybe I’m wrong. But Ray Dalio actually said something in there that stuck with me, brutally. He said: “I don’t care what it is that you think that you’re great at investing in, or you like. Most people invest in what they like: real estate or stocks or bonds or what they think they’re good at, or what they were raised with. He said: “Whatever asset class you invest in, I promise you: in your lifetime, it will drop no less than 50% and more likely 70% at some point.”

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Tim @ 30:31

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Yep.

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Tony @ 30:31

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And he said: “That is why you absolutely must diversify.” You’re gonna say: “But I can make so much more on this side!” And you know, I’ve had people throughout the years. I teach this market theory: this idea that if you don’t wanna do it, make the asset allocation simple. It sounds like such a big word.

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Tim @ 30:44

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Yeah.

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Tony @ 30:45

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It’s just buckets. Some of my money’s gonna go in the secure bucket. That bucket is like a church steeple; I’m gonna.. It’s not going away. It’s very secure type of investments; its upside is not gigantic in terms of speed. But you know what? Compounding process: If you give it enough time, those low returns are giant returns, still. But you’re not gonna lose. And then there’s this bucket called.. well, most people call it “Growth Bucket” and I call it “Risk/Growth.” ‘Cause it’s really risk first.

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Tim @ 31:09

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Yeah.

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Tony @ 31:09

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And on that, I’m taking bigger risks for potentially greater rewards. And now the question is: “How do I balance these?” Am I 60-40? 50-50? 80-20? And that’s designed, really, by three things: Number one, what’s your real risk tolerance - not what you think it is?

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Tim @ 31:22

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Yeah. And they’re never the same.

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Tony @ 31:23

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They’re never the same. You know, I do these Wealth Mastery Programs for years. Invariably, I’ll do some crazy thing like I’ll say: “Everybody, stand up. Make change.” They look at me and they start reaching in their pockets and making change. And so somebody’ll pull out $5, $10. Somebody’ll pull out $100 and someone’ll come up and take it and give them five bucks. And they’re like, you know; they don’t know how to react. So this goes on for three or four minutes, the music’s going on; I go: “Okay, stop. Right, sit down.” Then I go on and talk about something else. And invariably, somebody’s like: “Hey, wait a second! I want my $100 back!” I say: “What are you talking about?” They say: “I want my $100 back, the game’s over!” I said: “What made you think the game was over?”

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Tim @ 32:01

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[Laughs]

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Right? And who said it was your $100? It takes a while but they finally get, you know? “I’m stressed about $100.” What do you think is gonna happen when you lose $1 million? Or half a million? Or $100 thousand? Or ten grand? I mean, your risk tolerance is not what you think it is. So when we find out what your risk tolerance is and we’ve got great ways to do that in the book. And then you figure out, really, how much time do you have? When you’re younger, you got more time to make mistakes, and so you can take bigger risks. You’ve got a time line on your part. The next piece is how much is your cash flow? If you look at those three things, now you can decide how much goes in my security bucket, how much goes in my growth. And if you don’t make that decision, it’s the most important investment decision of your life, according to everybody I’ve ever interviewed. Like, what percentage secure, what percentage growth and risk? Then when things come up, you’re always gonna go for the growth-risk, ‘cause it looks so sexy and exciting. And I can’t tell you how many people over the years have done this: They’re telling me “Why would I put money over here when I’ve got this real estate? I’m making 120%!” I have a friend that built some of the first big condos in Vegas back in the boom time. And he actually went to my programs, sold the business, he had made $200 million, invested in these condos, started building the Panorama Towers and places of that nature. And he was up to, like, three-quarters of $1 billion; I kept saying to him: “Dude, take some of your growth money and put it in the secure bucket, right? How many times have I told you this?” He goes: “Tony, I love you; I made $200 million ‘cause of you. But now, you know, all I touch goes to gold!” I’m listening and I go: “I love you, brother. But you know how many times I’ve had this conversation?” And then, guess what happens in 2008? How much do you think he’s lost? He was worth three-quarters of $1 billion, grown that rapidly in those short years. What do you think happened to his net worth?

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Tim @ 33:37

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I’m guessing it went down, according to the Ray Dalio prediction.

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Tony @ 33:40

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How about minus $400 million?

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Tim @ 33:43

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Ugh.

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Tony @ 33:43

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He didn’t just lose what he had; he lost everything he had and beyond. So then he’s trying to negotiate.

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Tim @ 33:48

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So he was leveraged..

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Tony @ 33:49

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He was leveraged out! Wiped himself out. Most people don’t put enough in the security bucket, is the lesson. And a guy like Dalio provides you a strategy that’s got great sustainability, but there are many approaches in the book. But you do have to decide how much is secure, how much is growth. And I show you how to do that.

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And now we gotta emphasize, at least, I’d be curious to hear your thoughts, Tony. For me, it took me a long time to think, to realize what investing represents for me. And it’s not maximizing return, it’s maximizing quality of life.

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Tony @ 34:17

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Yes.

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Tim @ 34:18

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And there’s a big difference.

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Tony @ 34:19

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Yes.

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Tim @ 34:20

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Uh, and for me at least, I have a very kind of barbell strategy where I have.. super super safe stuff and then the startup stuff, but I need to modify that - I want to modify that. Because it’s not currently all seasons, at all.

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Tony @ 34:36

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Yes.

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Tim @ 34:37

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And, uh, the, um, sort of.. For people out there who might say: “You know, I don’t wanna think about it.” I would just emphasize that you’re making decisions every day about where you allocate your time, your money, your resources. Whether or not you wanna call yourself an investor, you are an investor.

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Tony @ 34:54

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Totally true.

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Tim @ 34:56

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If you make no decision, that’s also a decision. It’s important to become literate, I think, with a lot of these basic concepts, which is not difficult.

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I wanna say a bit about that. People need to remember that everybody’s a financial trader, but most people are making a bad trade. ‘Cause they’re trading Time for Money.

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Tim @ 35:11

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Yep.

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Tony @ 35:12

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Worst trade of your life, ‘cause you can’t get more time; we all know it. So what this book’ll do, if you’re willing to just give yourself a chapter a day for a month, or go crazy in a weekend? You’ll go from, maybe not even knowing what these terms sound so complex to being juiced. ’Cause you’ll be an insider; you will look at the world in a totally different way. You’ll go: “That is the biggest rip-off on earth. That won’t ever happen to me. That is where I wanna go.” You know, make some decisions and then it’s not an everyday thing! Literally, you might do re-balancing once a year for fifteen minutes! I mean, unless you’re gonna be a trader every day, this shouldn’t dominate your life! When did you give yourself the initial education about one of the most important areas of your life? There’s only a few areas that really impact the quality of your life: your body, your emotions, your relationships, your finances, your career or your business, the spiritual side of your life. How do you use your time? About a half-dozen or so, maybe seven areas that really affect you. Most people, major and minor things: they know so much more about shit that doesn’t matter!

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Tim @ 36:07

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Yeah.

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Tony @ 36:08

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So I’m saying to people: “Give yourself the gift of just a short burst of time so that you can truly look at life and be good at this area.” If you want someone to do it for you; you can, but at least, then, you lead them.

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Tim @ 36:19

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Yeah.

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Tony @ 36:19

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You’re not being led by them, right?

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Tim @ 36:21

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No, definitely. And I think that, uh, just like one of the things that sort of changed my world in startup investing was: any company you invest in should be able to return the fund. Just as like a general, the amount of money that you’re investing over X number of years. Just like the, sort of, $1 to $5..

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Tony @ 36:38

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Yeah.

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Tim @ 36:38

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..principle, with Tudor Jones. And there, there are a couple of pithy heuristics, like rules-of-thumb, that I think will change how you view not just money or stocks, but the world in general. Such as, assume - in the Dalio, uh, case - that, you know, your favorite area, your kind of “pet” investment bucket is going to decrease by at least 50% in the next, you know, X period.

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Tony @ 37:03

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Fifty to seventy.

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Tim @ 37:03

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Fifty to seventy! Even better!

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Tony @ 37:05

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[Laughs] Seventy will get your attention.

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Tim @ 37:06

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Yeah, that’ll get your attention. Yeah, and plan accordingly, right?

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Tony @ 37:09

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Yeah.

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Tim @ 37:10

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And, uh, I think that, um.. It’s been a very very fun process to read this and also to connect with you over it. Uh, lemme ask you, if I could - ‘cause I know, uh, you’ve got a lot planned, and, uh, I also wanna finish up the last few interviews. [Laughing] In the book, reading the ones that you did. Uh, I’m curious if there are any particular funny stories. What was the funniest story or interaction you had while researching or writing this book, that comes to mind?

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Tony @ 37:35

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Well I think I shared one of them already; it’s funny now, wasn’t so funny in the moment. Walking into Carl Icahn’s office, so excited, so prepared, ready to rip open. This is a guy; he’s got the greatest returns of anybody out there; and very few people know that. Kiplinger did the first review that really showed all the numbers. I mean, if you’d invested in him in 1968, you’d have a 31% compounded return within his firm versus at Buffett’s firm: you’d have a 20% return. People think of Buffett as the ultimate guy. So, you know, I got all these facts, figures, I’m excited; and to have him literally throwing my video crew out the door and then telling me: “No audio!” [Laughs] I’m like: “How the hell am I gonna keep up with this guy and capture the notes?” So that’d be one. A fun moment was introducing Carl Icahn to Jack Bogle - they didn’t know each other, and they’re fans of each other. So it’s like I came from being an outsider to now introducing them. Most of the time with these guys wasn’t as much funny as it was fascinating. It was just seeing the level they play the game. Like a really great poker player. It’s like they know the psychology; they know the numbers. They know the probability. Then you just realize why most people are never gonna win, because, you know, they’re not gonna win gold medals against these guys who are playing this game day and night, night and day, you know? And some of that isn’t new to me because Paul’s been my dearest friend for, you know twenty-one years now. But it’s fascinating to see that in every industry, in every sport, there are few players that play at the highest level. And they have one thing in common above all else: hunger. But it’s an unquenchable hunger. You have that hunger, I see that in you; that’s why I’m a fan of your work. It’s like you’re gonna keep finding the answer; doesn’t matter what answer you got - you wanna know more. And every one of these people has that. And it’s fun to be around them because there’s energy in every one of these people. They have different styles, but there’s an energy, and that energy is driven by that desire, that hunger to know more.

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And the other observation, uh, that was reinforced by reading the book was that they also- they have principles; they have the operating systems that they use. Whether you are trying to lose weight, trying to quit smoking, trying to improve your investment returns, you can ensure against your lesser instincts by having a system.

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Tony @ 39:45

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That’s right.

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Tim @ 39:46

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And putting systems in place so that when you have the impulses that are going to lead to your destruction: eating a cupcake when you shouldn’t.

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Tony @ 39:54

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Yes.

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Tim @ 39:55

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That you can mitigate against that. And it’s possible you can set these things up in advance. Uh, I would love to - before we wrap up - just ask a couple of rapid fire questions.

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Tony @ 40:02

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Sure; go for it.

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Tim @ 40:04

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Okay. Uh, when you think of the word “Successful” who is the first person that comes to mind?

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Tony @ 40:09

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Gosh. Uh, I like Richard Branson; I don’t know why that’s the first thing that popped into my head when you said that. Only because I think he lives so passionately, he lives life on his terms: there’s no bullshit with him. He’s having a good time, he’s close to his family. Uh, lives on an island like I do? [Laughs] Extraordinary leverage and a very conscious man: about society and what to do. His Elders Program and things like that; he’s very socially-conscious, and yet still has a great time. So he’d be one of the first people, I think of, probably.

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Tim @ 40:39

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Uh, what have you changed your mind about over the years? Any positions you’ve taken that you’ve reversed, since?

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Tony @ 40:45

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Uh, you don’t have to be perfect in everything you do, including not eating anything enjoyable [Laughs]

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Tim @ 40:50

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[Laughs]

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Tony @ 40:51

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Probably be a big one, my wife would tell ya. Gosh, over the years, you’re always updating. I mean, I don’t look at it as changing as much as updating and informing myself, you know? If you thought of it as changing, I think you’d find resistance within your own consciousness or your own identity. And you know identity plays such a strong role: the need to be consistent with what you believe. And that’s why the political system’s so messed-up: somebody can actually grow and they’re seen as inconsistent.

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Tim @ 41:14

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Yeah. Oh, it’s a mess.

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Tony @ 41:15

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It makes the political system not grow, it makes the system locked in place. So I don’t look, think there’s anything that comes to mind just real directly. But I think there’s a constant upgrading. And sometimes it’s those two millimeter upgrades that provide the biggest impact.

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Tim @ 41:29

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Yeah. Uh, side note for folks: it’s also common among the top venture capitalists and investors - Marc Andreessen, who created the graphical web browser. One of his mottoes for Andreessen and Horowitz is “Strong opinions, weakly held.” So he’s ready to be corrected or updated as you mentioned. What would people be surprised to know about you?

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Tony @ 41:51

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Oh gosh. You should ask my wife that question!

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Tim @ 41:53

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[Laughs]

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Tony @ 41:55

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[Laughing] I don’t know; some people would not be surprised at all. People in my events would know: I’m a love bug. I’m the kinda guy that can be brought to tears just by seeing someone do the right thing. And yet, I’ll run through that wall, shake the building with ten thousand people in it. I’m a softie, really, truly, underneath it all; that’s what drives all this in me.

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Tim @ 42:12

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Okay.

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Tony @ 42:12

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I love to see people lit up, I love to see people happy, I love to see people freed.

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Tim @ 42:17

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So I’m gonna ask an unusual one given that answer. Uh, what’s the first face that comes to mind when you think: “Punchable?”

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Tony @ 42:22

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Huh! Punchable?

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Tim @ 42:24

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[Laughs]

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Tony @ 42:25

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Oh my gosh. Well I had an interesting meeting with President Obama! [Laughs]

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Tim @ 42:28

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[Laughs]

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Tony @ 42:30

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Um, it was actually interesting. It was, it was, I was invited by Marc Benioff to, uh, come. It was for, I dunno, fifteen of the, you know, billionaires there at Silicon Valley. I was in San Jose, and it was for the president, before his reelection. And I voted for the president, you know? I’ve been a fan of the president but I was getting more and more frustrated by watching the style of politics, which was, you know, creating greater and greater division. There was, it seemed to me, a great level of inaccuracy in the promises being made that were very hard not to see. And that time, it was the whole thing: “We’re gonna raise taxes on the rich, and that’s gonna balance the budget.” I’ve done the numbers, I did a whole video on it: It shows you can kill every rich person in the United States and take all their money and take all the corporations and all the advertising for the Superbowl and I do this whole long gig that came from some statistics another man put together for me. I did it together and you can’t cover the budget for one year, and then what do you do next year, right? So I said to Marc: “Listen. I support the president. Honestly, I don’t know how I could support the other side. I don’t know that I’m the guy to be there, I don’t know if I’m a fan. Marc, you and I are so aligned in so much, but the way Simpson-Bowles was this close and he let it pass..” We had both sides willing to make some tough decisions. “..is beyond me! It lacks the leadership that fundamentally, the president of the United States - in my mind - has to have.” That’s my judgment; I’m just a person. But it’s like I don’t understand. Taking the easy route is not something that’s gonna sustain or grow this economy, long term. And I said: “Using the political capital - even though I’m in support of healthcare - using that healthcare where half the country is upset about it, pushing it down their throat and trying to say it’s gonna cost less money.” It’s just like, there’s certain things.. Marc says: “I agree.” Marc is the second largest fund-raiser..

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Tim @ 44:18

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[Laughs]

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Tony @ 44:19

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For the president! So I said: “How the hell are you raising all that money?” He goes: “Well, I feel stronger about him than the other guy.” And he said: “You and I are aligned with him on so many other things: the environment, people’s right to marriage regardless of sexual preference.” I said: “Of course we are!” So he said: “Come. Come and be there.” I said: “You know me, I’m totally respectful, but I’m honest.” He goes: “Come. I’ll sit you right next to the president, we’ll have a great conversation.” So I went to this meeting and it was crazy. I’ve worked with so many presidents over the years, but I’d not gone with Obama. It’s downtown San Jose, they locked everybody in their buildings and literally, it looked like one of those movies where everybody’s died and there’s nothing left but the buildings.

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Tim @ 44:58

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[Laughs]

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Tony @ 45:00

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It was the wildest thing for several blocks. Took us in this room, there’s nobody else, there’s these sixteen people, many of which you’d know from Silicon Valley. And I listened and the President came in and was really wonderful and he shared some comments. He said: “I’m not here to give a speech; you guys have built the biggest companies in the world.” Not me, I don’t fit that category, so I wasn’t gonna say anything. And he said: “But I really wanna hear from you guys.” So Marc turns to him and says: “Are you ready for some real give and take, Mister President?” He says: “Yeah, okay: who wants to go first?” And he (Benioff) points straight at me.

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Tim @ 45:29

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[Laughs] That’s what friends are for!

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Tony @ 45:31

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[Laughing] So I said: “Mister President.” I literally paused. I shouldn’t do this, I’m not here; they’ve all paid a quarter of a million bucks to be here. Actually, I’d never done this before, I went: “(counting) A thousand and one, a thousand and two..” Tried to see if somebody else was gonna say something. It was really.. finally, I said: “Okay. Well, Mister President, I want you know I voted for you, I know you’re a man of tremendous integrity, I share the same values with you, I believe. But I’m really confused about two things. Number one: how you think you’ll be able to have a second four-year run and get anything done when you have taken the other side and demonized them to a point that they’re never gonna work with you? And my second question - if I ever get one - would be “Why didn’t you support Simpson-Bowles? It was right there; it needed to be done.”

A long pause, then he said: “Well, those are fair questions. First of all, I don’t think I’ve ever demonized the other party ever.” And I just sat there and I watched him say it and I was like “Are you kidding me? I’m not Republican, but come on! Both sides have demonized you.” And he goes: “And they’ve been really unfair to me..” And he went through this piece. And I said: “Mister President, that’s happened with every President, to be fair.”

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Tim @ 46:42

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Right.

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Tony @ 46:44

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That’s what they both do. And it’s gotten worse throughout the years, for sure. So I said: “What about Simpson-Bowles?” And he said: “Well, Tony, your hedge fund friends..”

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Tim @ 46:56

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[Laughs]

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Tony @ 46:55

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“They wouldn’t like it if we got rid of the 15% tax. Most Americans wouldn’t like it if we got rid of their mortgage deduction and all those things. I’ve got a better plan.” And I said: “The better plan is you’re gonna raise taxes back to Bush on the wealthy, it takes $4 billion a day to run this country. You know as well as I do, the estimates of all that money in won’t even cover three months of this government spending. It won’t solve anything, you’re gonna have to raise taxes on everyone to cover this. So how do you deal with that?” And he and I went back and forth.

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Tim @ 47:30

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[Laughs]

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Tony @ 47:30

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And to be fair, I’m telling my version of the story. I’m sure he’d give you a different version of the story. But there’s a point where I felt I was losing rapport with every person in this room, but I had to be honest! Finally at one point, a Secret Service man came over and grabbed my wrist and said: “I think that’s enough.” I didn’t raise my voice, The President, to honor him, he said: “No. Tony’s created some creative tension here, and I’m not used to that in these rooms. It’s a fair question.” I said: “I just wanna know because I voted for you and a lot of people I know that voted for you, and I don’t know if they will again, I don’t know if they need to - you’re gonna win anyway.”

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Tim @ 48:02

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Yeah.

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Tony @ 48:03

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“But I’d really love to know what to tell them about how you’re gonna govern with this level of division.” And at the end, I just said: “Thank you for your time.” And everybody else got up and asked questions like: “Will you give a shoutout to the Jews?” Just like that. No hardball in there at all, but you know; it was a political environment. Afterwards, I thought: “Oh my God, everybody’s gonna hate me!” And then Reid Hoffman walks up to me - you know, from Linkedin - and says: “I can’t belive you asked him that question!”

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Tim @ 48:26

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[Laughs]

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Tony @ 48:29

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“I can’t believe you asked him that! I’ve been wanting to ask him that question forever! Good on you!” [laughing] People coming up to me.. The President came around and when he came back around, shaking everybody’s hand, shakes my hand. I shook his hand and grabbed him with both hands, I said: “Mister President, I’m not some stupid Republican who’s just looking for some tax break; this week, I fed a quarter of a million people in San Jose. I don’t live here: I came to do an event, this is what I do wherever I go. I came from nothing and I don’t forget where I’ve come from. I care as much as you care, but I’m really concerned about your ability to get your agenda done in the next season of your career if you don’t find a way to bridge your communication style with these people. Intelligence is not enough, you’ve got to build relationship.” And he stared at me, and he said: “How about you, my chief of staff, and you come visit me in the White House? You and I, one on one for an hour?” I was like blown away. I thought: “I didn’t reach him at all?” It was mind-boggling. Marc was right there, he goes: “That was unbelievable! I loved seeing that energy, that back and forth. You can really help him!”

So then, um, about a week later, they were getting ready for these debates. And the other side had called me and asked me if I would work with their particular candidate privately. And I’m not one-sided; I wanna see a debate that’s real. So I worked with Mister Romney, and that’s the first debate they went in. He did pretty well. And my invitation was no longer extended!

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Tim @ 49:51

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[Laughs]

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Tony @ 49:52

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So I wouldn’t say: “punch in the mouth” but I would say “frustrated” because here’s a man who has such integrity, President of the United States, and I think a classic human being who cares deeply, smart as a whip. But it’s, you know, the failure to find a way to bridge compromise is both sides’s responsibility. But in my mind as a citizen, I think the President of the United States has got to make that happen. There are presidents that have done that, and there presidents that haven’t, and I think it’s not his fault that we’re at an impasse, politically, that is not allowing him to do the things that I think are necessary to put our house in order in this country. Easy for an outsider to see it, but as a citizen, we all have a right to our opinion. And so, I don’t know if I’d think “punch” but I’d say..

Tim Ferriss speaker headshot

Tim @ 50:30

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[Laughs]

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Tony @ 50:28

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“Shake him!”

Tim Ferriss speaker headshot

Tim @ 50:32

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Metaphorically.

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Tony @ 50:32

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It might be a better one.

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Tim @ 50:33

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Wow, that’s a hell of a story. I, uh, one last question and, uh I think people are really gonna enjoy this and I can’t wait to to see the comments and the questions also. Uh, I have my moments of doubt; dark moments. I don’t know if you’ve had those moments of doubt..

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Tony @ 50:50

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No. never.

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Tim @ 50:52

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Never? no little..

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Tony @ 50:52

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[Laughs] we’re human!

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Tim @ 50:52

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What do you do, uh, when you have those, those, those, those, dips? When you have those… those down moments and, uh, and doubts?

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Tony @ 51:01

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Those moments I’ve experienced primarily when I’ve found an inner conflict, uh, that’s hard to resolve. That’s been in the past when I’m travelling around the world. You know, I feel like I’m made to do what I do as a human being. I’m certainly not the only human being that can help people but I’m able to help a lot of people. I’m filled with some privilege and it’s, uh, it’s a gift and something that’s earned, and something that is part of grace. And, um, and yet, the greatest thing in my life, outside of my work and my family, is my wife. Ironically, when I met her, she had extreme motion sickness since birth, and I spent almost a decade going everywhere ‘cause she would throw up on - we never wanted to be apart - and she would throw up on the flight up and the flight down. She literally lost - I don’t know what it was - 19 pounds, which she couldn’t lose. She was a size zero. I took her to every typ of physician. I took her to every kind of natural healer, acupuncturist. I took her to NASA, to an expert there. Nobody was able to help her. I took her to the guy who works with the Top Gun pilots; ‘cause if they use their vestibular system, you know, they’re dead. So I had this system and he was the only one who could help her like, maybe 10% of the time, not throw up.

But the process she did, this tightening in her body created a constriction in her lymph fluid and she developed a tumor.

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Tim @ 52:13

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Oh.

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Tony @ 52:14

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And so the darkest days are, you know, what I think I’m made here to do is hurting the person I love most. Or I gotta be apart and, you know, corny as it sounds, I just, I just believed that there was a larger lesson that I needed to find a way to break through. We finally did, and she no longer… doesn’t love motion, but she no longer throws up on any flight. And it was, ironically, an experience in India, which sounds so bogus to me, but I experienced it. She’s never thrown up since that time. It’s mind-boggling. It’s this man who’s.. he doesn’t - he’s not of any particular faith - it’s called Oneness. And, uh, he does this form of meditation where it basically primes your brain to a certain way of being and it balanced her body out: just amazing. But the point of the matter is I went through all this pain and all this questioning and all this doubt, but I kept asking: “What’s right? What’s real?” And I trusted my gut even when it was painful to trust my gut. And I found that that’s probably the most useful thing.

The other thing you gotta do is.. it sounds stupid. Hydrate your ass off. Make sure you rest, because in a lowered state of energy, you’ll doubt everything. The worst thing that can happen, if you are what I call “Energy-Rich” if you are physiologically at a peak, you can slam anything against you and you’ll know. Um, and so, that’s not to say you won’t have those downs but that’s what I try to do, to put my body back in the strongest place. That’ll put your mind back there and your heart is always there. And then, ask what’s right and live there. And you’re gonna still make mistakes, and when you do, I think it’s being- forgiving yourself and learning from it and moving the hell on to what’s next as quickly as you can so that that experience allows you to help other people. And for me, the worst events I’ve ever gone through in my life have always been the best events ‘cause I figured: “If I’m experiencing this, someone else is too, and if I figure it out, I can help millions of people.” And that’s given me sanity, so I’m not just dealing with my pain or bullshit or whatever the case may be, and that’s a big part of my life is ending suffering - which is impossible. But ending it in areas of people’s life is possible. And, you know, it’s like what they always say, you know, it’s corny, you know? You know: “Suffering is optional.” Pain, Pain, you know.. everybody’s got a pain in their life. But suffering is optional, and I really believe I can help people out. More importantly than to get out of the suffering is giving an experience of more of the joy that’s already inside them. And I live to see that light in their eyes, and I’m gonna look forward to seeing it in you at some point, at an event, ‘cause you’ll have an experience of it. And it won’t be this discussion. Discussion is wonderful; experience is ten times better. I always tell people: “A belief is a poor substitute for an experience.” Right? You can believe all you want about what you think something is, what investing is, or what China is like. Go to China, get the experience, go to the event. Then you’ll know, and I’m a big guy, I put people in the experiences as quick as i can and let their spirit and their heart and their soul kind of take over, and that’s what my life’s about.

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Tim @ 54:54

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It’s a good mission; it’s an amazing mission. Uh, where can people learn more about the book, more about you? Where would you like them to visit you?

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Tony @ 55:03

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I’ll give you the address, but they can go to Tonyrobbins.com - that’s the easiest way - and, uh, the book, again, is called “Money: Master the Game - The Seven Simple Steps to Financial Freedom” And, um, uh, what I’ll do is I’ll give you a site, and if people decide to do this and they go to Amazon. If they send me their receipt, I will give them something I did for people during the pre-publication period, which is: I made, uh, three videos that are kind of a fast track. So if somebody’s gonna like: “600 pages seems like a lot to me.” Well here’s, this’ll get you going. Um, I think for a lot of people, the audio/video approach is a good approach to them and it’ll take ‘em deeper in the book. But I do want you to know that, um, most people - I don’t know if you’ve experienced this - most people read the book are entertained because it isn’t just like some heavy factual piece, it takes you on a journey. And it’s, uh, a journey through the financial world, which is wild; weird, crazy stuff is happening. It’s a journey into the lives of people who started with nothing that are the wealthiest people in the world, how they did it. And it’s your own journey about where you’re gonna take yourself from this point on and how you wanna live that life and experiences that you wanna not only have for yourself, but what you really wanna give, and that’s the greatest thing. I look back and when you think about money: money is nothing but a tool that you either use for a life of service and a life, to increase the quality of life for yourself and the people you love, or it’s used on you as a weapon. And I’m big on saying: “Time for it to no longer be a weapon used against you.” And the only way to do that is educate yourself, and you can do it in a way that’s really fun, and that’s what this is.

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Tim @ 56:27

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Oh, absolutely. So, guys, check out the book. Check out Tony. Tony, you’ve had a huge impact on my life and just to the entertainment aspect of the book. Uh, I have tons of books sent to me, I mean, dozens a week, as I’m sure you do. Huge stack, uh, a lot of the questions that I asked did not require me to read the book. And I ended up pushing off [Laughing] probably a half-dozen important projects of mine because I got pulled into the book! And I remember: I e-mailed you, and I said: “You know, in twenty years, you still have it! Hot Damn! Like, I, that feeling, the sort of, uh, the Tony Robbins response that I had reading your material back in high school.” And you e-mailed me, you were like: “High school? How old are you?”

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Tony @ 57:05

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[Laughs]

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Tim @ 57:05

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Uh, it’s a really fascinating read, and I know some of you listening are my friends who are deep in the world of finance: you will find things, whether it’s in the interviews at the back, the profiles on the, you know, uh, the top performers over the last several decades, or within. It’s a really fascinating romp with lots of good stories. So, Tony, thank you so much for taking the time.

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Tony @ 57:26

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Thanks for coming down, great to meet you in person, finally.

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Tim @ 57:29

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Definitely; I hope it’s not the last!

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Tony @ 57:30

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[Laughs] It won’t be, brother.

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Tim @ 57:31

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Thanks!

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Tony @ 57:31

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Thank you!

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Tim @ 57:34

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Thank you for supporting the sponsors of this show; I’ve used them, I like them, and I think you will too. 99designs.com/Tim - It’s the world’s largest marketplace of graphic designers. You can see the projects that I’ve put up, the competitions that I’ve spearheaded, including the book cover of the 4-Hour Body, and you can also get a $99 upgrade for free. So check it out at 99designs.com/Tim. Of course, you can subscribe to this show on Itunes; you can also find every other episode in the show notes, links from this episode at fourhourblog.com and just click on “Podcast.” There’s all sorts of other cool stuff, including my interactions with people like Warren Buffett, Mike Shinoda of Linkin Park, the list goes on and on and on. And I would love your feedback; let me know what you thought of this show, who you’d like to hear on this show next, and any the thoughts, really. You can find me at Twitter at @Tferriss - that’s https://twitter.com/tferriss and on Facebook at facebook.com/timferriss until next time, thank you for listening.

End @ 58:50