If you just sit around all day doing nothing and doesn’t take care of yourself, you get sick and unhealthy. Same true with money. If you don’t manage your money well and don’t take good care of it, you’ll find that the total amount just gets smaller and smaller. To make your money grow, similar to your body, you need to exercise it or make it work.
This free book summary of Tony Robbins’ Money Master The Game, will explain to you how you can turn a small nest egg into a mountain of cash that will let you live your life exactly how you want to. If you invest your money in the right vehicle, then financial freedom will follow. If you are smart about it, you may never have to work again.
In this Money: Master The Game book summary, you’ll discover how you can strategize your investments, how much money you really need before you can quit your job and know what is the best financial advice anyone can give you.
Compounding will help your money grow year after year.
Is your money working hard for you? Is it just sitting lazily in your bank account earning 1% or even less? You see, we need to make our money work hard for us as we won’t be able to rely on traditional saving methods in the future.
Many of us rely on our pension or retirement fund. Retirement systems are failing. For example, in the United State, the 401k retirement plan was originally invented to supplement income in old age, but unfortunately, this may no longer be applicable in our generation. We shouldn’t rely on this alone.
Other pension plans were hit hard by the 2008 financial crisis, and those who paid into them lost a great deal. To prevent this you have to makeyour money work for you, by compounding.
Compounding helps your money grow year after year by allowing interest to build up. If for example, you invest $100 on a vehicle that gives you 10 percent profit. After a year your money grows to $110. If you leave the investment untouched, you’ll generate another 10 percent on $110 the year after, then on $121 the following year, and so on.
The author told a story about Benjamin Franklin. When he died, he left $1,000 to the cities of Boston and Philadelphia. The condition was to invest the money and not touched for 100 years. The time passed and half a million was drawn from the account, the rest was left untouched for another 100 years. By that time, the original sum had transformed into $6.5 million.
Always put some money into your investment fund each month.
The first rule of financial security: Add money to your savings. Saving is never easy, but try to imagine you are adding to your financial freedom fund., the base on which your financial freedom will be built.
For sure you won’t have a lot of cash in the beginning, but you can build the amount gradually. It’s like climbing a mountain, at first, it’s hard and you don’t seem to be getting anywhere. But when you reach the top, suddenly you realize why you worked so hard.
It’s important to keep adding money to your financial freedom fund. You have to keep doing it even when you think you don’t have enough cash to go around. Ask yourself, what can I give up today so I can put some money on my freedom fund? Make small adjustments to be able to save more.
Aim to save 10 percent of your income every month, if you find this too much, manage just 5 percent or less. Regardless, you’ll still benefit from the generated interest. The important thing to learn here is to form a habit of saving and investing regularly on your financial freedom fund.
Always remember. The more money you add, the greater the returns you’ll get. That’s the magic of compounding.
Don’t fall for investment myths, but do your homework and research the best place to invest.
Should you get a professional to manage your investments for you?
Many people let stockbrokers manage their investment funds. Financial professionals really don’t know what’s best for you or your money. Your adviser gets paid, whether you profit or not. Their job is to sell you things, whether good or bad. Don’t get me wrong, some financial professionals of course, still have good intentions though.
Other people invest in mutual funds managed by a professional. These often come with large fees attached, however. When you consider these fees andthe average returns they earn, it’s clear such funds aren’t the wisest financial decisions.
You can learn to invest on your own, however, as long as you remember a couple of helpful rules:
1. Believe in yourself. This is the best financial advice that anyone can give you. If you don’t have the right attitude when you try something new, you’re bound to fail.
2. Do your research. Do not just follow what others do. Find out what you need for yourself. Learn about what other successful people have done with their investments, and see if you can do the same.
3. Be cautious. Don’t expect that you’re going to beat the market, as very few do. Try your best, but know that there is no simple or magic path to success.
Do you have a financial goal? Do you want to just cover basic costs, or live the life of the rich?
How much money do you need to be free from financial stress? Some may need a couple hundred dollars, some may need a few million. It depends really on the person. The first thing to remember is to be realistic with your goal and your goals should depend on you and what you want.
Here are five different goals to get you thinking about just how far you want to go.
Goal one: Generate enough money from investments to cover your basic monthly bills, for things like rent, mortgage, food, energy, and transport.
Goal two: Generate enough to cover basic needs plus extra for fun things, like new clothes or gadgets.
Goal three: Generate enough to secure your financial independence. This means living entirely on compounding interest and never having to work again.
Goal four: Generate enough to secure your financial independence and earn event more so you can go on better holidays or eat in nicer restaurants. Basically, make them improve your lifestyle.
Goal five: Achieve absolute financial freedom. This means having enough money to do anything you want at any time!
Now, which of these goals fit your dreams and financial aspirations?
If you don’t have a plan, it’s easy to feel overwhelmed or get lost in the details. When you know what you’re aiming for, it’s much easier to get there.
The path to financial freedom may be slow at first. But don’t give up; time is on your side.
Yes, it’s going to be hard, but don’t give up. You can achieve financial freedom, as long as you keep working at it.
At times, you may feel like your income isn’t high enough for you to save. As long as you continue adding money to your financial freedom fund, even if it’s not a lot, you are good to go. Don’t let these things discourage you and ignore that little voice in your head that’s telling you to give up.
Aside from self-doubt, we should avoid also short-term thinking. Many people overestimate what they can accomplish in a year, but then underestimate what they can accomplish in a decade.
Here are a few tips to keep in mind as you work toward financial freedom:
1. Change your life and lifestyle. Do it now so you can save money on mortgage payments, heating, and taxes.
2. Invest only when you know you’ll get good returns. A good rule to use here is to only invest when you expect returns of over five times the amount. Even if you fail to get those returns three out of five times, you’ll still have earned enough.
3. Try to lessen your tax burden. Make it a goal to reduce this.
Diversify your investments and keep things balanced.
The key to investing is to know how to diversify your assets. Invest in different products that have varying degrees of risk.
Here are three areas, or buckets, where you need to concentrate your investments.
The first bucket is your security bucket. This is where you put investments that are the most secure, even if they aren’t necessarily the most profitable. These have low risk but low returns as well. Bonds are a good example.
Next, there is your growth bucket, which is for investments that are riskier. This is where you can earn big returns, but you can lose more, too. You get high returns but the risks are higher as well. You might invest in equities, meaning stocks and shares. Many stocks beat the market average in the long run, but they may be volatile and lose value in the short term.
The last bucket is your dream bucket. This is where you put some of the profits you earn from your other buckets. Your dream bucket helps improve your lifestyle.
Remember: the entire point of achieving financial security is to spend your money in ways you enjoy. If you don’t have a dream bucket, saving and investing is useless!
Strive to keep everything balanced. As you earn and lose money, you’ll need to keep constantly moving it around to ensure that each bucket has the optimum amount.
Take advice from smart investors to guide your path, but be sure to insure yourself against bad times, too.
If you want to succeed in anything, learn from people who have succeeded before you.
Analyze and copy what other successful investors have done, you’ll have a much better chance of reaching your goals.
Also, regardless of what method you are following, convert some of your savings into annuities, financial contracts where an insurance company guarantees future payments in exchange for immediate payments. Get yourself insured for bad times and ensures you to get a guaranteed lifetime income.
The progress will be slow at first but as long as you are dedicated and committed you will definitely reach financial freedom. Diversify your investments and seek advice from people you who already did it. Get yourself insured to get a guaranteed lifetime income. If you work hard, you can become the master of your money and live the life you really want. I hope that this Money: Master The Game book summary will help you get started with your journey to financial freedom!
Don’t forget your ultimate goal: spending your money the way you want.
They say money brings you happiness. Partly true, but it’s actually what you do with it that matters. Having lots of money in your bank account won’t make you happy, but spending it the right way will. Saving itself isn’t the point, you are working to be able to spend it on experiences you enjoy, or that give your life meaning.
What about you? What is the most important thing you’ve learned in this Money: Master The Game free book summary? Share your key takeaways or leave your comments below.
Purchase the book: Money: Master The Game
Available in Print, eBook, and Audiobook
What are the books that you want me to summarise or review? Comment the title and the author of the book below!
Robbins has a lot of valuable advice on how you can transform your life for greater happiness and success. To learn what they are by clicking here.