Money: Master the Game: 7 Simple Steps to Financial Freedom

—SIR FRANCIS BACON

Money.

Few words have the power to provoke such extreme human emotions.

A lot of us refuse to even talk about money! Like religion, sex, or politics, the topic is taboo at the dinner table and often off-limits in the workplace. We might discuss wealth in polite company, but money is explicit. It’s raw. It’s garish. It’s intensely personal and highly charged. It can make people feel guilty when they have it—or ashamed when they don’t.

But what does it really mean?

For some of us, money is vital and crucial but not paramount. It’s simply a tool, a source of power used in service of others and a life well lived. Others are consumed with such a hunger for money that it destroys them and everyone around them. Some are even willing to give up things that are far more valuable to get it: their health, their time, their family, their self-worth, and, in some cases, even their integrity.

At its core, money is about power.

We’ve all seen how money can have the power to create or the power to destroy. It can fund a dream or start a war. You can provide money as a gift or wield it as a weapon. It can be used as an expression of your spirit, your creativity, your ideas—or your frustration, your anger, your hate. It can be used to influence governments and individuals. Some marry for it—and then find out its real price.

But we all know that on some level it’s an illusion. Money isn’t even gold or paper today, it’s zeros and ones in banking computers. What is it? It’s like a shape-shifter or a canvas, assuming whatever meaning or emotion we project on it.

In the end, money isn’t what we’re after . . . is it? What we’re really after are the feelings, the emotions, we think money can create:

that feeling of empowerment,

of freedom,

of security,

of helping those we love and those in need,

of having a choice, and

of feeling alive.

Money is certainly one of the ways we can turn the dreams we have into the reality we live.

But even if money is just a perception—an abstract concept—it doesn’t feel that way if you don’t have enough of it! And one thing is for sure: you either use it, or it uses you. You either master money, or, on some level, money masters you!

How you deal with money reflects how you deal with power. Is it an affliction or a blessing? A game or a burden?

When I was choosing the title of this book, a few people were actually outraged at the suggestion that money could be a game. How could I use such a frivolous term for such a serious topic! But, hey, let’s get real. As you’ll see in the pages to come, the best way to change your life is to find people who’ve already achieved what you want and then model their behavior. Want to master your finances? Find a financial master and imitate how he or she deals with money, and you will have found a pathway to power.

I can tell you right now, I have interviewed many of the wealthiest people in the world, and most of them do think of money as a game. Why else would anyone work ten or 12 hours a day after they’ve made billions of dollars? And remember, not all games are frivolous. Games are a reflection of life. Some people sit on the sidelines, and some play to win. How do you play? I want to remind you, this is a game that you and your family can’t afford to lose.

My promise to you is this: if you will stay with me and follow the 7 Simple Steps in this book—the steps that have been distilled from the world’s most successful financial players—you and your family will win this game. And you can win big!

But to win, you have to know the rules and learn the best strategies for success from those who have already mastered the game.

The good news is that you can save years of time—and in a few minutes—by simply learning the pitfalls to avoid and the shortcuts to experiencing lasting success. The financial industry often works to make this topic feel incredibly complex, but in reality, once you get past the jargon, it’s relatively simple. This book is your opportunity to stop being the chess piece and become the chess player in the game of money. I think you’re going to be very surprised at how, with an insider’s understanding, you can easily transform your financial life and enjoy the freedom you deserve.

So let’s get to it. Just imagine what life would be like if you had mastered this game already.

What if money didn’t matter?

How would you feel if you didn’t have to worry about going to an office every morning, or paying the bills, or funding your retirement? What would it be like to live your life on your own terms? What would it mean to know you had the opportunity to start your own business, or that you could afford to buy a home for your parents and send your kids to college, or have the freedom to travel the world?

How would you live your life if you could wake up each day knowing there was enough money coming in to cover not only your basic needs but also your goals and dreams?

The truth is, a lot of us would keep working, because that’s the way we’re wired. But we’d do it from a place of joy and abundance. Our work would continue, but the rat race would end. We’d work because we want to, not because we have to.

That’s financial freedom.

But is it a pipe dream? Is it really possible for the average person—more importantly, for you—to make this dream a reality?

Whether you want to live like the 1% or just have the peace of mind from knowing that you won’t outlive your savings, the truth is you can always find a way to make the money you need. How? The secret to wealth is simple: Find a way to do more for others than anyone else does. Become more valuable. Do more. Give more. Be more. Serve more. And you will have the opportunity to earn more—whether you own the best food truck in Austin, Texas, or you’re the top salesperson at your company or even the founder of Instagram.

But this book isn’t just about adding value—it’s really about how to go from where you are today to where you truly want to be, whether that’s financially secure, independent, or free. It’s about increasing the quality of your life today by developing the one fundamental skill that the vast majority of Americans have never developed: the mastery of money. In fact, 77% of Americans—three of every four people—say they have financial worries, but only 40% report having any kind of spending or investment plan. One in three baby boomers have less than $1,000 saved! Polls show that fewer than one in four trust the financial system—with good reason! And stock ownership has been hitting record lows, particularly among young people. But the truth is, you don’t earn your way to freedom. As you’ll see later in this book, even multimillion-dollar earners such as Godfather director Francis Ford Coppola, boxer Mike Tyson, and actress Kim Basinger lost it all because they didn’t apply the fundamentals that you’ll soon be learning. You have to be able to not only hold on to a portion of what you earn for your family, but, more importantly, multiply what you earn—making money while you sleep. You have to make the shift from being a consumer in the economy to becoming an owner—and you do it by becoming an investor.

Actually, a lot of us are already investors. Maybe you first got into the game when Grandma bought you a few shares of her favorite stock just for being born, or perhaps your employer auto-enrolled you in the company’s 401(k), or maybe you first became an investor when a friend told you to forget the Kindle and buy Amazon stock instead.

But is this enough? If you’re reading this now, my guess is that you know the answer: no way! I don’t have to tell you it’s not your parents’ and grandparents’ investment world. The plan used to be so simple: go to college, get a job, work your butt off, and then maybe get a better job with a bigger corporation. After that, the key was to find a way to add value, move up the ladder, invest in company stock, and retire with a pension. Remember pensions? A promise of a never-ending income for life? They’ve become relics.

You and I both know that world is over. We live longer now on less money. New technologies keep coming online, stoking a system that often seems designed to separate us from our money instead of helping us grow it. As I write these words, interest rates on our savings hover near zero, while the markets rise and fall like corks on the ocean. Meanwhile, we’re faced with a financial system of limitless choices and mind-boggling complexity. Today there are more than 10,000 mutual funds, 1,400 different ETFs, and hundreds of global stock exchanges to choose from. It seems like every day we’re pitched more and more complex investment “instruments” with an alphabet soup of acronyms: CDOs, REITs, MBSs, MLPs, CDSs, CETFs . . .

WTF?

How about HFT? That’s short for high-frequency trading, where 50% to 70% of the tens of millions of trades that churn through the market each day are now generated by high-speed machines. What does that mean for you? It takes only a half second, or about 500 milliseconds, to click your mouse to complete your E*Trade order. In that short time, the big boys with the supercomputers will have bought and sold thousands of shares of the same stock hundreds of times over, making microprofits with each transaction. Michael Lewis, bestselling author of the HFT exposé Flash Boys: A Wall Street Revolt, told 60 Minutes, “The United States stock market, the most iconic market in global capitalism, is rigged . . . by a combination of the stock exchanges, the big Wall Street banks, and high-frequency traders . . . They’re able to identify your desire to buy shares in Microsoft and buy them in front of you and sell them back to you at a higher price!” How fast are these guys? One HFT firm spent a quarter of a billion dollars to straighten the fiber-optic cables between Chicago and New York, reconstructing the landscape and literally terraforming the earth to shave 1.4 milliseconds off its transmission time! But even that’s not fast enough. Some trades already take place in microseconds—that’s a millionth of a second. Soon HFT technology will allow these trades to happen in nanoseconds—a billionth of a second. Meanwhile, they’re laying cable on the ocean floor, and there’s even talk of solar-powered drones acting as microwave relay stations to connect exchanges in New York and London.

If all of this leaves you reeling, I’m with you. What are your chances of competing with flying robots trading at the speed of light? Where do you turn to find a path through this high-tech, high-risk maze of choices?

An expert is an ordinary man away from home giving advice.

—OSCAR WILDE

The problem is, when it comes to money (and investing), everybody has an opinion. Everybody’s got a tip. Everybody has an answer. But I’ll give you a hint: they rarely have one that will really help you. Have you noticed how beliefs around money are like religion and politics? Conversations can get intense and emotional. Especially online, where people without any real knowledge or mastery will promote their own theories and criticize others’ strategies with such vehemence, even though they have no proven track record. It’s like a psychologist on Prozac telling you how you can have a fulfilled life. Or an obese person telling you how to get thin and fit. I tend to separate pundits into those who talk the talk and those who walk the walk. I don’t know about you, but I’m sick and tired of hearing from all these “experts” who tell us what to do, but haven’t produced results in their own lives.

If you thought you were going to hear from another investment guru making crazy promises, you came to the wrong place. I’ll leave that to the financial entertainers who scream at you about buying the hottest stock, or implore you to save your money and put it in some mythical mutual fund. You know the one, where they promise you’ll continuously compound your money with 12% annual growth. They dole out advice that too often has no basis in reality, and often they don’t even invest in the products they push. Some of them might sincerely think they’re helping, but people can be sincere and be sincerely wrong.

I want you to know I’m not one of those “positive thinkers” who’s going to pump you up with a false view of the world. I believe in intelligence. You have to see things as they really are but not worse than they are—that view of life only gives you the excuse to do nothing. You may know me as the “smiling guy with the big teeth” on TV, but I’m not here to tell you to do a bunch of affirmations—I’m the guy who’s focused on helping you dig deep, solve real problems, and take your life to the next level.

For 38 years, I’ve been obsessed with finding strategies and tools that can immediately change the quality of people’s lives. I have proven their effectiveness by producing measurable results where others have failed. So far I’ve reached more than 50 million people from 100 different countries through my books, videos, and audio programs, and another 4 million in live events.

What I’ve known from the beginning is that success leaves clues. People who succeed at the highest level are not lucky; they’re doing something differently than everyone else does. I’m interested in those people: those who have a relentless hunger to learn and grow and achieve. Don’t get me wrong. I’m not deluded. I’m aware there are very few people in the world who are fit and healthy and who sustain it. Most people don’t have decades of sustained love and passion in their intimate relationships, nor do they experience ongoing gratitude and joy. There are very few people who maximize their business opportunities. And there are even fewer who start with little or nothing and become financially free.

But a few do! A few do have great relationships, great joy, great wealth, and endless gratitude. I have studied the few who do versus the many who talk. If you want to look for obstacles, what’s wrong is always available. But so is what’s right! I am a hunter of human excellence. I seek out those individuals who break the norms and demonstrate to all of us what’s really possible. I learn what those few extraordinary individuals do that’s different from everybody else, and then emulate them. I find out what works, and then I clarify it, simplify it, and systematize it in a way to help people move forward.

Ever since the dark days of 2008, when the global financial system nearly melted down, I’ve been obsessed with finding a way to help everyday people take control of their money and fight back against a system that’s often been rigged against them. The fix has been in for years, and it hasn’t gotten a whole lot better with all those so-called reforms on Capitol Hill. In some areas, it’s gotten worse. To find answers, I interviewed 50 of the most brilliant, influential players in the world of money. In this book, you won’t get talking heads, and you won’t get my opinions, either. You’ll hear it straight from the masters of the game: self-made billionaires, Nobel laureates, and financial titans. Here’s just a sampling of a few of the masters of money that you will be learning from in the pages ahead:

• John C. Bogle, the 85-year-old sage with 64 years of stock market history and the founder of the Vanguard Group, the number one mutual fund company in the world;

• Ray Dalio, founder of the largest hedge fund on the planet, with $160 billion in assets;

• David Swensen, one of the greatest institutional investors of all time, who grew Yale University’s endowment from $1 billion to more than $23.9 billion in less than two decades;

• Kyle Bass, a man who turned $30 million in investments into $2 billion in two years during the subprime crisis;

• Carl Icahn, who has outperformed Warren Buffett, the market, and virtually everyone else in the last one-, five-, and ten-year cycles;

• Mary Callahan Erdoes, whom many consider to be the most powerful woman in finance. She oversees more than $2.5 trillion as CEO of J.P. Morgan Asset Management; and

• Charles Schwab, who led a revolution to open up Wall Street to individual investors, and whose iconic company now has $2.38 trillion under management.

I’ll put you in the room with these and many other superstars who get consistent results, decade after decade, in up markets and down, booms and busts. Together we will uncover the core secrets to their investment success and see how to apply them even to the smallest amount of money.

And here is the key: I wrote this book based on timeless wisdom of the most successful investors in the world. After all, none of us knows which way the economy will be headed by the time you’re reading this book. Will there be inflation or deflation? A bull market or a bear? The idea is to know how to survive and thrive in any market condition. These real experts will explain how. Plus, they’ll be opening their portfolios to show you the mix of investments that they rely on to weather every storm. And they’ll answer this question: If you couldn’t pass on any of your financial wealth to your children, but only a set of principles, what would they be? That could be the greatest inheritance of all, and you don’t have to be one of their kids to get it!

The secret of getting ahead is getting started.

—MARK TWAIN

Get ready, because together we’re about to go on a journey through 7 Simple Steps to financial security, independence and freedom! Whether you’re a millennial just starting out, a baby boomer facing retirement, or a sophisticated investor looking to keep your edge, this book will offer you a practical blueprint for setting and achieving your financial goals and help you break free from whatever limiting behaviors might be holding you back from true abundance. We’ll explore the psychology of wealth, something I’ve studied and taught for nearly four decades. We’ll tackle the money mistakes people make, zeroing in on what keeps them from following through on their best-laid plans. And to make sure you get the results you desire, I’ve gone to the best behavioral economists on earth to find solutions that really work—small, simple adjustments that automatically trigger you to do what others need discipline to maintain; strategies that can make the difference between retiring comfortably or dying broke.

Let’s face it: so many smart and accomplished people have put aside this area of money because it seems so complicated and overwhelming. One of the first people I gave this manuscript to to review is a brilliant friend named Angela who has accomplished mastery in many areas of her life—but never in the area of money. She told me that people thought she was amazing because she’d sailed 20,000 miles of ocean in some of the roughest seas on small sailboats. But she knew she neglected her finances, and it embarrassed her. “It seemed so confusing, and I couldn’t be competent. I already felt defeated, so I gave up, even though it’s not in my nature.” But she found that by following the 7 Simple Steps in this book, she could finally get control of her finances, and it was easy and painless! “Gosh, I could save for my future just by cutting a few things that don’t give me joy,” she told me. Once she started thinking about saving, she was able to set up an automatic investment account, and by chapter 2.8, she had already transformed her life.

A few days later, she came in to see me and said, “I got my first-ever brand-new car.”

I asked her, “How did you do it?”

She said, “I began to realize that I was spending more money on my old car for repairs and gas than it cost me to finance a brand-new car!” You should have seen the look on her face when she pulled up in a shiny new pearlescent white Jeep Wrangler.

So I want you to know that this book is not just about how to have a comfortable retirement, but also about how to have the quality of life you desire and deserve today. You can live life on your own terms while you simultaneously lock in your future quality of life as well! The feeling of empowerment and inner strength and certainty that you experience when you master this area of your life will spill into everything else: your career, your health, your emotions, and your relationships! When you lack confidence about money, it unconsciously affects your confidence in other areas too. But when you take charge of your finances, it empowers you and excites you to take on other challenges!

What holds us back from getting started on the road to financial freedom? For a lot of us, like my friend Angela, it’s the feeling that we’re in over our heads. We’ve been taught to think, “This is too complex” or “This is not my field.” Frankly, the system is designed to be confusing, so that you’ll give up control to the “professionals” who reap enormous fees by keeping you in the dark. You’re going to learn in the chapters ahead how to prevent that from happening, and, most importantly, I’m going to show you that investing your way to freedom isn’t confusing at all.

One reason people succeed is that they have knowledge other people don’t. You pay your lawyer or your doctor for the knowledge and skills you don’t have. They also have their own special language that can at times keep them insulated from the rest of us.

For example, in the medical world, you might hear that 225,000 people have died “iatrogenic deaths” in the past year. According to the Journal of the American Medical Association (JAMA), it’s the third largest cause of death in the United States. Iatrogenic. How’s that for a hundred-dollar word? It sounds important, but what does it even mean? Is it a rare tropical disease? A genetic mutation? No, iatrogenic actually refers to an inadvertent death caused by a doctor, or a hospital, or an incorrect or unnecessary medical procedure.

Why don’t they just come out and say so? Because it doesn’t serve a medical institution’s interests to put it in plain language a layperson can understand. The financial world has its own jargon too, with special words for things that are really additional fees disguised in language that would make it impossible for you to realize it is taking much more of your money than you would ever imagine.

I hope you’ll let me be your translator as well as your guide on this journey. Together we’ll break the code and cut through the complexity that keeps most of us feeling like outsiders in the world of finance.

Today there is so much information that even the most sophisticated investors can feel overloaded. Especially when we realize what’s being pushed on us often has nothing to do with our needs. Say you’re having some mild chest pains, and you Google the word heart. What do you see? It’s not something about the heart attack you might want to deal with right now. Instead, you get Heart, the music group that hasn’t had a hit in 20 years. How does that help you?

My plan is to serve you by becoming your personal financial search engine—a smart search engine, one that will filter through all the superfluous, even harmful financial information out there to deliver simple, clear solutions.

Before you know it, you’ll be an insider too. You’ll learn why chasing returns never works, why nobody beats the market long-term,1 and why the vast majority of financial experts don’t have a legal responsibility to serve your best interests. Crazy, right? You’ll learn why the returns advertised by mutual funds are not the returns you actually earn. You’ll find solutions that could add literally millions of dollars to your lifetime of investing returns—statistical studies show that you can save between $150,000 and $450,000 just by reading and applying the principles of section 2 of this book! You’ll be putting money back in your own pocket, not the “fee factories.” You’ll also learn about a proven way of growing your money with 100% principal protection, and tax free to boot (IRS-approved). This vehicle is finally available to individual investors like you.

And here’s what truly sets this book apart: I don’t just tell you about investment strategies that the ultrawealthy have and that you can’t afford or access; I’ve found ways to make them affordable and accessible for you! Why should the privileged few be the only ones to tap into extraordinary opportunities? Isn’t it time that we level the playing field?

Remember, it’s your money, and it’s time for you to take control.

A moment’s insight is sometimes worth a life’s experience.

—OLIVER WENDELL HOLMES, SR.

Before we go on, let me tell you what moved me to write this book. If you’ve watched any of the coverage of my work over the years, or if you’ve read any of my previous books, you probably know my track record for creating massive and measurable change—helping people lose 30 to 300 pounds, turning around relationships that seem to be at their end, helping business owners grow their companies 30% to 130% in a year. I also help people overcome enormous tragedies—from couples who’ve lost a child, to soldiers coming back from Afghanistan with post-traumatic stress disorder. My passion is helping people create real breakthroughs in their relationships, their emotions, their health, their careers, and their finances.

For nearly four decades, I’ve had the privilege of coaching people from every walk of life, including some of the most powerful men and women on the planet. I’ve worked with presidents of the United States as well as presidents of small businesses. I’ve coached and helped transform the performance of sports stars, from the early days with hockey great Wayne Gretzky to today’s superstar Serena Williams. I’ve had the privilege to work with award-winning actors with the coolness of Leonardo DiCaprio and the warmth of Hugh Jackman. My work has touched the lives and performances of top entertainers from Aerosmith to Green Day, Usher to Pitbull to LL Cool J. And billionaire business leaders as well, such as the casino magnate Steve Wynn and the internet wizard Marc Benioff. In fact, Marc quit his job at Oracle and began building Salesforce.com after attending one of my Unleash the Power Within seminars in 1999. Today it’s a $5 billion enterprise and has been named the “World’s Most Innovative Company” by Forbes magazine for the last four consecutive years. So obviously my clients don’t come to me for motivation. They have plenty of that already. What they get from me are strategies that help them hit the next level and keep them at the top of their game.

In the financial arena, since 1993 I’ve had the honor to coach Paul Tudor Jones, one of the top ten financial traders in history. Paul predicted the October 1987 Black Monday crash—still the largest single-day US stock market decline (by percentage) ever. While markets plummeted around the world and everyone else was losing his shirt, Paul as much as doubled his investors’ money in 1987. He did it again in 2008, bringing his investors nearly a 30% positive return while the market plummeted 50%! My job working with Paul is to capture the principles that guide all his decisions. Then I put them into a system that he uses daily and, most importantly, at critical times. I’m not a positive-thinking coach. Quite the opposite: I’m a prepare-for-anything coach. I’ve been in touch with Paul, tracking his trading every day through a roller coaster of market conditions. From the tech bubble of the late 1990s to 9/11. From the growth in real estate and the collapse of the subprime market to the financial meltdown of 2008. I’ve been there during the subsequent European debt crisis as well as the largest one-day percentage crash in gold prices in three decades in 2013.

In spite of the diversity of these financial challenges, in 28 full consecutive years, Paul has never had a single losing year. I’ve been working with Paul for the last 21 of those years. He is truly unmatched in his ability to find the way to victory. I’ve had the privilege of being shoulder-to-shoulder with him while he made money consistently, no matter how volatile the market. Through him, I’ve learned more about the real world of investing and how decisions are made in tough times than I could get from a hundred MBA courses.

I’m also incredibly blessed to not only work with Paul during this time but also consider him one of my dearest friends. What I love and respect about Paul is that he not only creates financial results for himself but also is one of the most extraordinary philanthropists in the world. Over the years, I’ve watched him grow the Robin Hood Foundation from the simple idea of harnessing the power of free markets to alleviate poverty in New York into what Fortune magazine has called “one of the most innovative and influential philanthropic organizations of our time.” So far