What I learned?
To win at the Game of Money, you need to understand the game and master it, and to master it you need to know what’s your goal, and where the game is played. The book suggest you take the time to name your goal, so find out the price of your dream; How much money do you need? Then it breaks down the paths along the dream. The book also breaks down strategies, on investing systematically to build your wealth (the game is played in the market).
What’s Your Goal?
Milestones of wealth:
- Financial Security
- Home, utilities, food, transportation, and insurance all covered for the rest of your life
- Costs of above, with your current lifestyle x 12 x 20
- Financial Vitality
- Leisure activities, and luxury indulgences 1/2 of these costs covered for the rest of your life
- Financial Independence
- How much money do you need to maintain your current lifestyle, covered for the rest of your life
- Your current monthly costs for everything x 12 x 20
- Financial Freedom
- Independence + 1 or 2 significant luxuries, ie. Second house, sports car
- Absolute Financial Freedom
- Enough money to cover the above, plus all your indulgences, and give
Let’s break these down for my current situation:
| Costs | Monthly | Annual | Investment Goal to Cover it |
| Mortgage, Insurance, and Taxes | $2,443.68 | $29,324.16 | $586,483.20 |
| Food | $500.00 | $6,000.00 | $120,000.00 |
| Utilities | $615.00 | $7,380.00 | $147,600.00 |
| Phone | $250.00 | $3,000.00 | $60,000.00 |
| Electricity | $150.00 | $1,800.00 | $36,000.00 |
| Cable | $215.00 | $2,580.00 | $51,600.00 |
| Car | $490.00 | $5,880.00 | $117,600.00 |
| Gas | $120.00 | $1,440.00 | $28,800.00 |
| Car Insurance | $270.00 | $3,240.00 | $64,800.00 |
| Life Insurance | $80.00 | $960.00 | $19,200.00 |
| Financial Security | $4,518.68 | $54,224.16 | $1,084,483.20 |
| 1/2 Luxuries \ Indulgences Total | $750.00 | $9,000.00 | $180,000.00 |
| Gym | $150.00 | $1,800.00 | $36,000.00 |
| Date Nights | $200.00 | $2,400.00 | $48,000.00 |
| Hangouts | $100.00 | $1,200.00 | $24,000.00 |
| Shooting | $50.00 | $600.00 | $12,000.00 |
| Travel | $1,000.00 | $12,000.00 | $240,000.00 |
| Financial Security | $5,268.68 | $63,224.16 | $1,264,483.20 |
| Financial Independence | $6,018.68 | $72,224.16 | $1,444,483.20 |
| Significant Luxuries | $4,500.00 | $54,000.00 | $1,080,000.00 |
| Second Home | $3,000.00 | $36,000.00 | $720,000.00 |
| Used Luxury Car | $500.00 | $6,000.00 | $120,000.00 |
| More Travel | $1,000.00 | $12,000.00 | $240,000.00 |
| Financial Freedom | $10,518.68 | $126,224.16 | $2,524,483.20 |
Note, this is based on my current, would need to be updated if I have any life changes in my life, such as family size increase. I might also be missing a couple of items, but for now these might be good targets.
Where and how the game is played?
The game as mentioned above is played in the market, as you probably won’t earn your way to wealth. You’ll need to invest, if you’re hesitant on investing/trading remember you’re already a financial trader (trading time for money), not the best investment as you’ll eventually run out of time. Tony Robins suggest systematically investing 10-15% of your income monthly (if you think this is too much the book goes into different methods to grow into it), into a retirement account, invested into diversified index funds. Index funds are suggested as overall most actively managed funds don’t beat the market, and have higher fees to boot.
Diversification, through asset allocation:
There are different assets classes one can invest, and they fall between 2 main buckets Security and Risk/Growth, and you should be diversified between asset classes and buckets. Throughout Money Master the Game, Tony Robins interviews many of the world’s most successful investors, and asks them for investment strategies and asset allocations. Below are 2 of the Asset allocations from the book:
- David Swanson:
- Domestic Stocks 20% – Risk/Growth
- International Stocks 20% – Risk/Growth
- Emerging Stock Markets 10% – Risk/Growth
- REITs 20%- Risk/Growth
- Long Term US Treasury 15% – Security
- TIPS 15% – Security
- Ray Dalio’s: All Season’s Portfolio
- 4 Seasons of Investment, and asset classes that do well in each season
- Higher than expected economic growth: stocks, corporate bonds, & commodities/gold
- Higher than expected inflation: commodities/gold, TIPs
- Lower than expected economic growth: treasury bonds, TIPs
- Lower than expected inflation (deflation): treasury bonds, stocks
- Suggested asset allocation:
- Stocks, 30%
- Intermediate government bonds 7-15 years, 15%
- Long term government bonds 20-25 years, 40%
- Gold, 7.5%
- Commodities, 7.5%
- 4 Seasons of Investment, and asset classes that do well in each season
What else?
Money Master the Game, also discusses a few different topics not covered above.
- Different investment vehicles and their viability for building wealth
- Differences between fiduciaries and brokers
- Tax advantages of different strategies and investments types
- Essential human needs, and their psychological aspects in building wealth
- Strategies to speed up earnings, and investing
- Has and emphasis on giving, doing more for others
More on some of these topics to come at a later time.
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