Over the course of his career, Tony Robbins has learned a great deal about finance and money management.
He’s worth an estimated $500 million and counts many business and finance leaders amongst his friends and clients. His two books on the subject, ‘Money: Master the Game’ and ‘Unshakeable: Your Financial Freedom Playbook’ (co-authored by Peter Mallouk), both focus on enabling average people (ie, not financial experts) to develop strategies for optimising their wealth and setting themselves up for financial success.
With advice from financial experts like Ray Dahlio and Warren Buffet, Tony has isolated four steps that everyone can take to start building their own financial freedom.
Financial freedom is having the monetary stability to do what you want in life without having to worry about your bank account. -Tony Robbins
What does financial freedom mean to you? How much money would you need to do what you want in life?
This number will be different from everyone. While one person might be content with enough to have a small house and go on a yearly holiday, another person might not feel financially free unless they have the funds to buy a villa in the Mediterannean, or quit their job to sail year-round. It’s important at this stage to consider what’s really important to you in life.
Then, start calculating. Factor in normal living expenses, a cushion for unexpected expenses and emergencies, and leave enough left over so that you won’t feel financial anxiety. Write that number down, then look at how much you’re currently earning. Start thinking about what you need to do differently to make the amount of money you wrote down.
Everyone carries ideas about money and wealth with them from their upbringing. It’s important to identify and interrogate these beliefs so that they don’t hold you back.
Do you think you’re not talented enough to be financially successful? Do you believe you’ll never achieve financial freedom because no one in your family has?
Tony suggests that once you have identified these limiting beliefs, try replacing them with empowering statements like ‘I am worthy of experiencing financial freedom.’
It’s time to make money! Tony advises using the power of compounding to maximise your ability to generate wealth.
How does it work? “Divide your money into three imaginary buckets: security, risk/growth and dreams,” says Tony.
“Your security bucket is where all the money for your bills goes–you need this money to make your life function. Then, your risk/growth bucket is for things like high-yield bonds and stocks.”
“Lastly, your dream bucket is money that you can have fun with. When you receive a bonus or win a sum of money, it goes here.”
Pay attention to your finances, and adapt as circumstances change. Pay more into your buckets when you get a bonus or a raise. Watch your investments and anticipate changes in the market and the global economy. Work with an advisor to ensure that you are making the best financial decisions to help you achieve your goal of financial freedom.
Achieving financial freedom without taking big risks is a long game, but it pays off if you play it right.
Once you become comfortable with these basic principles, keep your financial education going. Remember what you’re working towards, and let your dream of a financially free life motivate you.
If you want more inspiration, check out this video of Tony Robbins on Good Morning America in 2016 to get a bit more insight into Tony’s financial perspective!
NOTE: You’ll notice in the video that Tony does a short gratitude and reflection exercise with the audience. This is part of what he calls ‘Priming’. You can learn more about Priming here.