Jordan Paris

4/6/17

UnShakeable by Tony Robbins

  • When I am unshakeable, I have an unwavering confidence even amidst the Storm.

Ch. 2

  • Start early
  • get in, Stay in
Compounding. earn money while I sleep. Hard to "earn" my way to financial freedom, must invest instead
  • FF = Freedom FactFF1: corrections happen once a year & only last 54 days on average. Hold tight, the storm will Pass.
FF2: 80% of corrections don't turn into bear markets.
FF3: Nobody can consistently Predict whether the market will rise or Fall.
FF4: The Stock market rises over time despite short term setbacks.
FF5: Bear markets happen every 3-5 yrs and they never last. spring always follows winter.
"The best opportunities come in times of maximum Pessimism"
FF6: every bear market in U.S. history has been Followed by a bull market
FF7: The greatest danger is being out of the market.

Ch. 3

index funds > actively managed funds

Ch. 4

beware of 401k Plans! use America's best 401k

Ch. 5

  • only 10% of financial advisers are registered investment advisors
Handwritten notes
Financial advisors are sketchy → see Ch. 5 to hire smart.

Ch. 6

Core four: key Principles

to guide every investment decision.
✓ 1. Don't Lose - best investors are obsessed w/ avoiding losses. The more money You lose, the harder it is to get back where You started.
✓ 2. Asymetric risk/reward - minimum risk w/ max Profit. 3 to 1 or 5 to 1?
✓ 3. Tax efficiency - It's not about what You earn, it's about what You keep.
50% tax if hold < 1 Year vs.
20% tax if hold > 1 Year
  • Mutual fund managers act as if taxes don't matter, but they do...
✓ 4. Diversification:
  • A. Diversify across diff asset classes - avoid Putting all $ into real estate, stocks, or bonds.
  • B. Diversify within asset classes - Don't Put all $ in a Favorite, like apple.
  • C. Diversify across markets, countries & currencies around world - We live in a global economy, don't invest solely in own country
  • D. diversify across time - You'll never know best time to buy. add investments over time to reduce risk.
Handwritten notes

Ch. 7

  • If You want to be certain You will never lose anything in the market, then Stay on the sidelines & never achieve Financial Freedom.
"We Pay a high Price for certainty."
  • Warren Buffet
★ - If You live in fear, You've lost the game before it begins
★ - Bear markets are the Single greatest opportunity to build wealth in a lifetime.
Prepare for the bear
★ Be fearful when others are greedy, & be greedy when others are fearful
Stocks - market is down 1/4 years, up 3/4. over the long term, Stock market news will be good.
Bonds - A bond is a loan. Legally required to Pay back. 1.8% Per year over 10 yrs. Little risk.
great to invest in bonds in anticipation of a bear market
Real estate investment trusts (REITs) - Hassle free, low cost way to diversify across different types of Property

To review

  1. Asset allocation drives returns - diversify globally across multiple asset classes. Never bet Your future on 1 country or asset class.
Handwritten notes
  1. use index fund as Portfolio's core - use large cap, midcap, small-cap, microcap
  2. Always have a cushion - to avoid selling at worst time. use bonds, REITs, & dividend Paying stocks

Psychology of wealth · 53Ch. 8

  • Biggest threat to financial well-being is own brain.
  • Knowing is not enough; investors need simple systems, rules, & Procedure to Protect us from ourselves
  • 80% Psychology, 20% mechanics

Common mistakes

  1. conf bias →seeking confirmation of Your own beliefs - instead, seek opinions that contradict Your own.
our brains are wired to seek Proof of how Smart we are, it's a trap!
→ Solution: Ask better questions & Find qualified People who disagree with You
  1. Mistaking recent events for ongoing trends.
Recency bias - recent events tend to carry most weight.
"Great things are not accomplished by those who yield to trends and fads and Popular opinion." - Jack Kerouac
"The biggest mistake that the small investor makes is to buy when the →
Handwritten notes
Cont. →market is going up on the assumption that the market will go up further - and sell when the market is going down on the assumption that it's going to go down further." - Harry Markowitz
→ Solution: Don't sell out, rebalance.
Decide how Your going to diversify;
Allocate a certain Percentage to stocks, bonds, & alternative investments. If You do 60% stocks + 40% bonds & the Stock market soars one year and You are left w/ 70% stocks + 30% bonds, then & vice versa →sell stocks & buy bonds to rebalance to 60/40.
Share Your Plan w/ someone You trust so they can verify Your not Flying into side of mtn.
rebalancing forces You to buy low & sell high.
  1. overconfidence - overestimating our abilities & knowledge = disaster. humans have a Perilous tendency to believe that they're smarter than they really are.
→ Solution: Get real, get honest. unless You are Warren Buffet or Ray Dalio then You don't have an edge that will make You a market-beating investor. ★ Just invest in index funds & hold through thick & thin
Handwritten notes
The Paradox: by admitting You have no special advantage, You give Yourself an enormous advantage.
  1. Greed & Quest for homeruns - it's tempting but victory goes to the steady survivors.
Achieve sustainable long-term results.
Financial media makes markets seem like a casino. "The stock market is a device for transferring money from the impatient to the Patient"
→ Solution: It's a marathon, not a sprint.
checking Performance of Your stocks daily is like feeding candy to Your brain; You get an endorphin hit but You have to realize it's addictive behavior & Just stop it.
Instead of checking & consuming financial media from experts, consume a more wholesome diet; Study Warren Buffet & Jack Bogle.
  1. Staying home - Humans tend to stay in comfort zones. Most americans only invest in the U.S. Stock market. Example: Sweden accounts for 1% of global economy, but Swedish investors have an average of 48% of their $ in Swedish stocks, whereas a rational investor would only invest 1% in such stocks.
Handwritten notes
→ Solution: Expand Your Horizons - by diversifying internationally, You decrease risk & increase returns.
  1. Negativity & loss aversion - Your brain wants You to be fearful in times of turmoil... don't listen! "Negativity bias"
Remember: on average, corrections have occurred about once/yr since 1900, & bear mkts every 3 to 5 yrs. The best investors relish these times. Don't act irrationally
→ Solution → Preparation is key. have the right asset allocation & focus on long term.

Master the mind

review

  • invest for long-term
  • trade less
  • lower fees
  • be open to opposing views
  • diversify globally
  • control fears.

Real wealthCh. 9

  • Real wealth is emotional, Psychological, & spiritual
  • live a magnificent life on Your own terms
→ Path to achievement ↓
  1. Focus - When You can't Stop thinking about it, this intense Focus unleashes a burning desire →
Handwritten notes
to achieve it. Your reticular activating system in brain will draw Your attention to anything that will help achieve it.
  1. Go beyond hunger, drive, & desire, and consistently take massive action. Find the most effective execution strategy & remaining flexible. Learn from & model successful People.
  2. Grace - The more You acknowledge grace, the more You seem to have. A deep sense of appreciation brings brings more grace into our lives.
To create an extraordinary life, master the art of fulfillment. Truly & sustainably happy.
Principle 1: Keep growing. Everything in life either grows or dies. Progress is key
Principle 2: Give - "You make a living by what You get. You make a life by what You give."
★ - Find Joy in every moment.
If disempowering thoughts come, then Step out & use 90 sec rule
Handwritten notes

Taking Notes

read it in the thread →