Tony Robbins, the larger-than-life motivational speaker, has a new gig. The millionaire self-help guru (who stands six feet seven inches tall) joined a financial advisory firm, Creative Planning, where he’s on the board and serves as ”chief of investor psychology.” He was so upset about the devastation that the 2008 financial crisis wrought, leaving young people with unserviceable college debts and their parents with devastated retirement accounts, that he wrote a book to help people become more financially secure.
The result is Unshakeable: Your Financial Freedom Playbook, a book that is readable in about four hours. It contains a lot of the standard advice: Buy index funds, diversify assets and, unsurprisingly, find a good financial adviser. (Perhaps you should consider the fine folks at Creative Planning.) The book was co-authored with Peter Mallouk, the founder of Creative Planning, which caters to people with portfolios worth $500,000 and up. Robbins talked him into creating a division that sells over the phone and web to the not-so-rich—people with investable assets of $100,000.
Cynicism aside, Robbins makes some good points in Unshakeable. Most people don’t understand the high fees that asset managers charge, which suck returns from retirement savings and other investments. Nor do they follow the advice of billionaires such as Ray Dalio, Warren Buffett and Paul Tudor Jones, who believe that ordinary investors can’t time the stock market—the best option is to stick with it through good and bad, rebalancing money between stocks and bonds at regular intervals.
The S&P 500 returned an average of around 10% in the 30 years to 2015, so someone who invested $50,000 in 1985 would have almost $1 million by 2015, if they weren’t drained dry by brokerage commissions and management fees, Robbins writes.
Between radio interviews and an appearance on Good Morning America, Robbins chatted with Quartz. The following has been edited for brevity and clarity.
You’re known as a life coach. Why did you start focusing on financial planning?
Actually, I am a lot of things. In 2008, when I saw so many people losing their homes and losing their net worth in their 401Ks, I started interviewing people who had been my clients for years—I’ve been coaching Paul Tudor Jones for 24 years. I got Carl Icahn and Ray Dalio and 50 of the smartest financial people to tell me how the average person could still win. I wrote a 700-page tome, Money: Master the Game, which became a best seller and sold a million copies.
But in the last year and a half, I have seen so much fear. We all know a crash is coming—the market is up 13% since the election—but you don’t lose unless you sell, 80% of those corrections don’t become bear markets and every single bear market has been followed by a bull market. Most millennials have a tremendous amount of education debt. I wanted to show them than the next crash is one of the first chances they have to leapfrog. You’ve got to understand the patterns of the markets that are long term. I wanted to empower the reader not to live in fear, to get into the game. Trying to time the market is a disaster.
You pretty much tell people to buy index funds, diversify their assets and rebalance their portfolios. Why do we need a book for that?
Well, that’s not what people actually do. This book is about becoming unshakeable, it’s about staying in the market. And I show them other alternatives and how to look for asymmetrical risk the way Paul Tudor Jones does. And to look for tax efficiencies, ways to minimize the tax they pay on their investment profits. But the book is really to educate the person so they have no fear. The goal is to change your thinking so that when you seek a snake you realize it’s actually just a rope. When there isn’t fear, you make better decisions. It’s also to remind you that money doesn’t change you, so I also talk about how to have your own happiness. We can tell people to buy index funds, but they don’t always do that.
Why aren’t millennials interested in the stock market?
They are scared out of their minds. They witnessed the 2008 financial meltdown. This generation is not as extreme as the Depression-era folks, but they don’t trust the financial markets. They are saving, but they aren’t getting anything for their savings. I spend a couple chapters in the book on how to find the right person to advise you and tell you the fee differences. There’s not a great deal of transparency in the financial industry.
Robo-advisors and algorithms can tell me how to invest. Why do I need a human?
There is great value in some of those technologies, but a robo-advisor isn’t going to help you when the market crashes. I personally believe you need someone to talk you off the cliff. So I look to a true fiduciary, not someone who is just a broker. You have to find someone who has been through bear markets and succeeded. That’s one of the reasons why I decided to partner with Creative Planning and our growth has been dynamic. Whether someone hires a fiduciary or not, the biggest challenge is to get them over their fears. And the robo-advisors aren’t going to help you with your entire financial life, tax planning and mortgages. [Watch Robbins explain to people that fiduciary is “not a sexual position.”]
You talk a lot about minimizing tax payments. What do you think about Donald Trump’s $1 billion write-off that allowed him to pay little or no income tax for 18 years?
I don’t know what’s really true. Personally, not paying taxes is not my goal. But in real estate, there are great tax advantages. Depreciation is huge and Trump had giant losses and they were legitimate and he took those losses. I am not a Trump fan, but he is the POTUS and I want to see America move forward. I do believe real estate has great tax efficiency. The biggest bill for everyone in life is taxes. Everyone has the right to organize their affairs to pay the least amount of tax as possible.