918 Become the Chess Player

Don't settle for being a pawn. If you've played chess before, then you'll know there's several different pieces in the game. You have the queen and king, obviously the most important pieces, and then on the other side of the spectrum, you have the pawns. Pawns can't do a lot. They have limited movement, and a lot of them get knocked over pretty early. There's always the chance they could win the game, but that chance is pretty low. When it comes to investing your money, it's easy to be a pawn and not a player. It's amazing how much compounded interest you can earn from investment, but it's equally upsetting how much of that interest can be negated by fees. If you don't know what you're doing, you'll probably become a pawn in someone else's game. On this Five Minute Friday episode, I revisit a conversation with legendary Tony Robbins who explains the necessity in being knowledgeable, strategic, and intentional when it comes to investing your money. If you've listened to The School of Greatness podcast before, you've probably heard me mention Tony Robbins. I've had him on the show several times, and he is an absolute legend. Tony Robbins is an entrepreneur, best-selling author, philanthropist, and the nation’s #1 Life and Business Strategist. Author of six internationally bestselling books, including the New York Times #1 best-sellers MONEY: Master the Game and UNSHAKEABLE, Tony has empowered more than 50 million people from 100 countries through his audio, video, and life training programs. Tony uses his money to help others and give back to humanity. Once he got rid of the scarcity mindset, he was able to become the man we know him as today. On February 27th, 2020, Tony Robbins and fellow entrepreneur Dean Graziosi are hosting a free webinar training for anyone who wants to learn how they can be successful in the exploding digital economy. If you're looking to follow in their footsteps, this is an opportunity you can't pass up. Thinking about investing but not sure how? You know, 96% of mutual funds don't beat the market. That leaves a 4% margin for you to succeed. If you want to win the game, you're going to have to be a player, not a pawn. Join me on Episode 918 to learn how with icon Tony Robbins. Disclosure: I am an independent Mastermind.com / Mind Mint LLC / BBG Enterprises Affiliate, not an employee. I receive referral payments from Mastermind.com / Mind Mint LCC / BBG Enterprises. The opinions expressed here are my own and are not official statements of Mastermind.com / Mind Mint LLC / BBG Enterprises or its parent company, Mastermind.com / Mind Mint LLC / BBG Enterprises LCC. If you enjoyed this episode, show notes and more at http://www.lewishowes.com/918 and follow at instagram.com/lewishowes Get more from Lewis! Get my New York Times Bestselling book, Make Money Easy! Get The Greatness Mindset audiobook on SpotifyText Lewis AIYouTubeInstagramWebsiteTiktokFacebookX

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Lewis Howes?

  This is Five Minute Friday.

• 0:10Lewis Howes?

  Tony Robbins, if you don't know who he is, for the past three decades, he has served as an advisor to leaders around the world. A recognized authority on the psychology of leadership, negotiations, organizational turnaround, and peak performance. He has been honored consistently for his strategic intellect and humanitarian endeavors.

• 0:33Tony Robbins?

  Well, the first thing you want to teach anybody, a child, a kid, anybody, is that you'll never earn your way to freedom. You just don't. You look around and you see Kurt Schilling, if you remember from Boston Red Sox.

• 0:43Lewis Howes?

  Yeah.

• 0:43Tony Robbins?

  He had $100 million a year, he's broke, bankrupt. I asked Warren Buffett, I said, "What made you the wealthiest man in the world?" And he smiled and he said, "Three things." He said, "Living in America, it's great opportunities. Having good genes, I lived a long time." And he said, "The last thing is compounded interest." And we all know about compounded interest, but I give the example of a book of this guy, Theodore Johnson, worked for UPS. Never made more than $14,000 in income in his entire life in a year. And in old age, he's worth $70 million. And how did he do it? All he did was he took a percentage of his income. His percentage was 20%. Now, his family said, "You can't, we can't save any money." But he met a friend who said, "If you pretend there's a tax, and the tax just took the money away from you, and you never see it, the money just comes out of your account and goes in an investment account, you'll be financially free."

• 1:28Tony Robbins?

  And so he was disciplined, he didn't look at it. It happened, $70 million by compounding. So, people's mistake is, and kids don't know this, adults don't know this, that you won't earn your way there, but you can compound your way there. What I wanted to do is say, "Where do you put that money?"

• 1:42Lewis Howes?

  That's a trick, right?

• 1:43Tony Robbins?

  That's a secret. Well, the first trick is actually doing it, almost nobody does.

• 1:46Lewis Howes?

  Right.

• 1:46Tony Robbins?

  The second trick is, you really have to understand where you're going to get hurt, because...

• 1:50Lewis Howes?

  The fees.

• 1:50Tony Robbins?

  The fees are just destroy people.

• 1:52Lewis Howes?

  You have a whole chapter about the fees, I was like, "This is incredible."

• 1:54Tony Robbins?

  Isn't it wild?

• 1:55Lewis Howes?

  It's nuts. You lose so much money just on the fees.

• 1:58Tony Robbins?

  Just so people have an understanding. Ninety-six percent of all mutual funds never match the market. I mean, they never beat the market. Mm-hmm. So I was just on a morning show this morning and Michael Bloomberg's, one of his guys in the house, some of his money. So I'm, you know, this is the only industry I know of where people think they can be a doctor. They think they can be a financial planner. And I said to him, I said, well, look, the statistics, Warren Buffett taught me this. He said, Ray Dalio told me this, David Swensen, who took Yale from one billion to 24 billion in two decades. These are people telling me this. Right. Nobody beats the market except a couple unicorns that nobody has access to. And I said, I didn't say you're not one of them, but I said, here's the truth. Ninety-six percent of mutual funds don't match the market. That means 4% succeed. Now, what are your chances of picking the right mutual fund? People don't know what they're doing.

• 2:43Tony Robbins?

  They put their money in a 401K, they pick a mutual fund not knowing what it is. If you play blackjack and you and I play and you get two face cards and your inner idiot says, hit me. I wanna, I wanna, one chance in a million, well, you're ace. You have an 8% chance of winning. Right. If you try to get a mutual fund, you got the 4% chance of winning. So what I show people is not only do you not get the result, thinking logically, if I hire someone else to do it, they'll do better than me, but in addition, you pay around 2,000% more than it's worth. Meaning you get the same exact product, the same stocks. If you own the index, right, you own a piece of all of America's best companies. Say the Vanguard 500 index, 500 top companies. That costs .17%. Like less than two tenths of a percent versus the average mutual fund is 3.17.

• 3:27Tony Robbins?

  Because it's compounded over time. But first you just hear that, so you're just like, the average car sold in America is a Honda Civic. It's $20,000. You can get the Honda Civic for $20,000 or you can pay $350,000. That's the difference between .17 and 3.17. But if you look at it over a period of like, how old are you? Thirty-one. Thirty-one, okay. So let's assume you and a couple buddies at 35 managed to put aside 100 grand. And you manage not to add any more money, but to grow it at 7% in spite of ups and downs in the market. And you're 65. How much money do you have? Well, if you paid 1% in fees, over those 30 years, a hundred grand became 574,000 bucks. Not bad for never adding another dime.

• 4:06Lewis Howes?

  Right.

• 4:07Tony Robbins?

  If you had 3% in fees, had the same growth, but 3% in fees, you now have 300

• 4:12Lewis Howes?

  Oh.

• 4:12Tony Robbins?

  And 24,000 bucks.

• 4:13Lewis Howes?

  Almost half as much.

• 4:14Tony Robbins?

  Quarter million dollars, 77% plus money. And you had the same return. It was just the fees. So the world, most people you ask them, what are your fees? They have no clue.

• 4:23Lewis Howes?

  Right.

• 4:23Tony Robbins?

  So I've created a site where people can go, they can type it in, you find exactly what your fees are and what you should be paying. And it's just, it's highway robbery. Where in the world would you pay 2,000, 2,000% more for the same exact product? You can only do it because the financial industry makes things so opaque, so convoluted, and people feel overwhelmed.

• 4:41Lewis Howes?

  And hard to understand.

• 4:42Tony Robbins?

  Very hard to understand. That's why I tried to come in here and go, look, time to become the chess player, not the chess piece. Let me teach you so you understand what's going on. It's not that complex. They use all these big words.

• 4:52Lewis Howes?

  Yeah.

• 4:52Tony Robbins?

  But when you know what's going on, you don't get screwed. And more importantly, you take advantage of the system instead of letting the system take advantage of you.

• 5:03Lewis Howes?

  Hey guys, if you enjoyed this inspirational clip from a past episode of the show, then you'll love the free book I'm giving away right now. It's called The Millionaire Morning. It includes some of my best tips for starting off your day with a millionaire mindset. Get your free copy at themillionairemorning.com and just pay shipping. Again, check it out right now, themillionairemorning.com.