The following are my favorite quotes from Tony Robbins' The Path: Accelerating Your Journey to Financial Freedom.
- Let me fill you in on the biggest secret of financial freedom: you probably won't earn your way to it.
- We all seem to wish for a return of the good old days when, in fact--let's face it--the good old days weren't all that good. Four hundred years ago, nearly 30% of the European population was wiped out from a single disease: the bubonic plague. Just 200 years ago, during the time of the stink bomb in London, 45% of children died before reaching the age of five. Having your children survive adulthood in Victorian England was a relative coin flip. Imagine the morale of a society that routinely lost nearly half of its offspring. And we don't need to go as far back as Victorian England. Just 100 years ago, 20 million people were killed in the four years or World War I. In 1918, the Spanish Flu tore through Europe, infecting 500 million people--one-third of the world's population--and killing over 50 million.
- It's important for us to recalibrate our brains to the blessing of the here and now. Our brains trick us into loving narratives of nostalgia, but these narratives contain a real flaw: they rarely capture the whole picture. History is riddled with war, disease, and famine, and these past times are brutally sobering when compared to our present day.
- A large part of the issue with financial media is that many people misunderstand the purpose for its existence. Media are businesses, and businesses exist to make a profit. The primary purpose of media is not to inform; it's to make money. Media outlets make money by selling advertisements, and news channels can charge higher prices for advertising placement if they have high ratings. Because of this, the primary purpose of any news outlet is to get as many viewers as possible (they call them "eyeballs") to tune in and to get get those viewers to watch for as long as possible.
- The stock market cares about only one thing above all else: anticipated earnings (i.e., future profits). If companies make more money, their shares become more valuable and their share prices eventually rise. The stock price is simply a reflection of a company's earning power. Everything else is noise.
- 6 Human Needs:
- Certainty
- Variety/Uncertainty
- Significance
- Love and Connection
- Growth
- Contribution
- The law of life says that if we aren't growing, we are dying.
- The secret to living is giving.
- "You make a living by what you get. You make a life by what you give." Winston Churchill
- If you want to become wealthy, start acting like the wealthy.
- Begin with a clearly articulated vision, and then point your efforts purposefully in that direction.
- When it comes to investing, the bolder the prediction is, the less valid the source.
- If you are attracted to a particular investment, I recommend that you challenge it rigorously. How could this investment go wrong? If this investment were to lose money, how would it happen? And what risks does this investment present? By forcing yourself to acknowledge the potential flaws in a particular strategy, you open yourself up to exploring ideas and beliefs contrary to your own. And that makes you a better investor.
- Both novice and experienced negotiators understand anchoring. The first price thrown out in a negotiation often becomes the anchor for all future discussions. Marketers have seized on the anchoring effect to influence consumers' spending habits. In a fascinating experiment, Brian Wansink, Robert Kent, and Stephen Hoch set up a display of Campbell's soup, advertising that it was on sale for 79 cents and there was no limit to the number of cans shoppers could buy. They then set up a different display with the same sale but a sign that read, "Limit of 12 per Person." The shoppers who purchased the soup without a limit bought an average of 3.3 cans. The shoppers who purchased the soup with a "limit" of 12 cans purchased 7 cans. The shoppers became anchored to the number 12, assigning meaning to it (for example, "Wow! This must be a really good deal and the grocery store doesn't want me to buy a lot or they'll lose money").
- Many investors fall victim to anchoring by buying a stock that has come far off its highs ("It's a bargain now!") or not purchasing a stock that has run on to new highs ("It's too overpriced now!") The reality is that the stock is often priced pretty darn close to where it should be, with an equal number of buyers on one side and sellers on the other. The only reason the investor thinks it is a "great bargain" or "overpriced" is the direction it has moved from its past anchor price. With an awareness of the anchoring effect, you can avoid holding losers too long and selling winners too early.
- When I speak with clients who have an investment they won't sell until it recovers, I ask them a simple question: "If you had cash instead of this stock, knowing what you are trying to accomplish, would you buy the same stock today?" The answer is almost always no, and when it is, we know the investor is hanging on because of loss aversion. Understanding the impact of loss aversion on our decision making can help us become better investors.
- If you don't need to sell an asset today, its current price is irrelevant.
- The key to profiting from stocks is to remain fully invested through all the seemingly constant corrections, crashes, and day-to-day movements that cause the fainthearted to jump ship at the worst possible time. Ideally you take the opposite approach and embrace these tumultuous times as buying opportunities!
