good morning believe nation today we’re going to talk about the how and the why
going to talk about the how and the why
going to talk about the how and the why investing many years ago a man named
investing many years ago a man named
investing many years ago a man named Classen wrote a book called the richest
Classen wrote a book called the richest
Classen wrote a book called the richest man in Babylon this book became a
man in Babylon this book became a
man in Babylon this book became a worldwide bestseller sold millions and
worldwide bestseller sold millions and
worldwide bestseller sold millions and millions of copies in every language and
millions of copies in every language and
millions of copies in every language and it has one basic principle in the book
it has one basic principle in the book
it has one basic principle in the book which is not very large which says pay
which is not very large which says pay
which is not very large which says pay yourself first resolved today that you
yourself first resolved today that you
yourself first resolved today that you are going to save and invest at least 10
are going to save and invest at least 10
are going to save and invest at least 10 percent of your income throughout your
percent of your income throughout your
percent of your income throughout your working life take ten percent of your
working life take ten percent of your
working life take ten percent of your income off the top of your paycheck each
income off the top of your paycheck each
income off the top of your paycheck each time you receive one pay yourself first
time you receive one pay yourself first
time you receive one pay yourself first and put it into a special account for
and put it into a special account for
and put it into a special account for financial accumulation the fact is that
financial accumulation the fact is that
financial accumulation the fact is that if you save just one hundred dollars per
if you save just one hundred dollars per
if you save just one hundred dollars per month throughout your working lifetime
month throughout your working lifetime
month throughout your working lifetime and you invest that money in an average
and you invest that money in an average
and you invest that money in an average mutual fund that grows at eight to ten
mutual fund that grows at eight to ten
mutual fund that grows at eight to ten percent per annum you will be worth more
percent per annum you will be worth more
percent per annum you will be worth more than 1 million dollars by the time you
than 1 million dollars by the time you
than 1 million dollars by the time you retire my good friend David Bach wrote a
retire my good friend David Bach wrote a
retire my good friend David Bach wrote a book – it said that if you simply spend
book – it said that if you simply spend
book – it said that if you simply spend one latte less 5 dollars a day and he
one latte less 5 dollars a day and he
one latte less 5 dollars a day and he call it the latte factor and saved that
call it the latte factor and saved that
call it the latte factor and saved that money $25 a week you’ll save $100 a
money $25 a week you’ll save $100 a
money $25 a week you’ll save $100 a month and you’ll become financially
month and you’ll become financially
month and you’ll become financially independent
independent
independent he’s been on half the television shows
he’s been on half the television shows
he’s been on half the television shows in America explaining that by saving a
in America explaining that by saving a
in America explaining that by saving a few dollars each day and saving it you
few dollars each day and saving it you
few dollars each day and saving it you can achieve all your financial goals
can achieve all your financial goals
can achieve all your financial goals what this means is that anyone even a
what this means is that anyone even a
what this means is that anyone even a person earning minimum wage if he or she
person earning minimum wage if he or she
person earning minimum wage if he or she starts earning enough and saves long
starts earning enough and saves long
starts earning enough and saves long enough can become a millionaire over the
enough can become a millionaire over the
enough can become a millionaire over the course of his or her working lifetime
course of his or her working lifetime
course of his or her working lifetime and that includes you
most people think that savings is smart
most people think that savings is smart but my Rich Dad told me years ago that
but my Rich Dad told me years ago that
but my Rich Dad told me years ago that savers are losers now I know this goes
savers are losers now I know this goes
savers are losers now I know this goes against the grain what most people tell
against the grain what most people tell
against the grain what most people tell you you know save money save money save
you you know save money save money save
you you know save money save money save money but the reason savers are losers
money but the reason savers are losers
money but the reason savers are losers began back in 1971 and in 1971 President
began back in 1971 and in 1971 President
began back in 1971 and in 1971 President Nixon took the u.s. off the gold
Nixon took the u.s. off the gold
Nixon took the u.s. off the gold standard and made the US dollar the
standard and made the US dollar the
standard and made the US dollar the reserve currency of the world one of the
reserve currency of the world one of the
reserve currency of the world one of the reasons we have so much economic
reasons we have so much economic
reasons we have so much economic volatility in our economies today high
volatility in our economies today high
volatility in our economies today high gas prices high food prices stock market
gas prices high food prices stock market
gas prices high food prices stock market booms and busts as housing values going
booms and busts as housing values going
booms and busts as housing values going down all can be attributed back to 1971
down all can be attributed back to 1971
down all can be attributed back to 1971 plus there are other changes so what
plus there are other changes so what
plus there are other changes so what makes a Rich Dad company different is
makes a Rich Dad company different is
makes a Rich Dad company different is that we do not really subscribe to the
that we do not really subscribe to the
that we do not really subscribe to the idea of being a saver we think it’s more
idea of being a saver we think it’s more
idea of being a saver we think it’s more important you learn to being an investor
important you learn to being an investor
important you learn to being an investor you know like if you had invested in oil
you know like if you had invested in oil
you know like if you had invested in oil ten years ago you’d be a rich person
ten years ago you’d be a rich person
ten years ago you’d be a rich person today even though savers are losses if
today even though savers are losses if
today even though savers are losses if they invested in gold ten years ago you
they invested in gold ten years ago you
they invested in gold ten years ago you would been a lot better off if you had
would been a lot better off if you had
would been a lot better off if you had invested in rental real estate ten years
invested in rental real estate ten years
invested in rental real estate ten years ago it would been way ahead of the
ago it would been way ahead of the
ago it would been way ahead of the savers so if you want to get ahead you
savers so if you want to get ahead you
savers so if you want to get ahead you need to not be a saver but learn should
need to not be a saver but learn should
need to not be a saver but learn should be an entrepreneur or an investor and I
be an entrepreneur or an investor and I
be an entrepreneur or an investor and I remembered a story and it really
remembered a story and it really
remembered a story and it really affected me years ago my mother was born
affected me years ago my mother was born
affected me years ago my mother was born in Montreal worked at a company called
in Montreal worked at a company called
in Montreal worked at a company called Kitty’s hogs and she used to come home
Kitty’s hogs and she used to come home
Kitty’s hogs and she used to come home and tell my brother and I cuz they pay
and tell my brother and I cuz they pay
and tell my brother and I cuz they pay them every week on Thursday morning
them every week on Thursday morning
them every week on Thursday morning she’d always invest a third of her
she’d always invest a third of her
she’d always invest a third of her paycheck into bail bonds with coupons
paycheck into bail bonds with coupons
paycheck into bail bonds with coupons she’d always say to me boys never spend
she’d always say to me boys never spend
she’d always say to me boys never spend the principle just the interest and
the principle just the interest and
the principle just the interest and never ever ever ever buy a security that
never ever ever ever buy a security that
never ever ever ever buy a security that doesn’t pay a dividend and you know back
doesn’t pay a dividend and you know back
doesn’t pay a dividend and you know back in those days
in those days
in those days stocks paid higher dividends than the
stocks paid higher dividends than the
stocks paid higher dividends than the bonds so example you know Bell Canada
bonds so example you know Bell Canada
bonds so example you know Bell Canada had a 6% yield on its five-year of paper
had a 6% yield on its five-year of paper
had a 6% yield on its five-year of paper and bonds the stock yield at seven to
and bonds the stock yield at seven to
and bonds the stock yield at seven to entice people to take the risk to own an
entice people to take the risk to own an
entice people to take the risk to own an equity and we got lost somewhere between
equity and we got lost somewhere between
equity and we got lost somewhere between the 50s and the 60s and 70s and we
the 50s and the 60s and 70s and we
the 50s and the 60s and 70s and we actually thought that it was a good
actually thought that it was a good
actually thought that it was a good investment to buy a stock that didn’t
investment to buy a stock that didn’t
investment to buy a stock that didn’t pay a dividend which to me is insane so
pay a dividend which to me is insane so
pay a dividend which to me is insane so anyways I I wanted to found a firm on
anyways I I wanted to found a firm on
anyways I I wanted to found a firm on that my mother’s basic concept because
that my mother’s basic concept because
that my mother’s basic concept because you know she died a few years ago and I
you know she died a few years ago and I
you know she died a few years ago and I was executive for her state and I looked
was executive for her state and I looked
was executive for her state and I looked at the portfolio which she never shared
at the portfolio which she never shared
at the portfolio which she never shared with anybody
with anybody
with anybody but 40 years compounded dividends and
but 40 years compounded dividends and
but 40 years compounded dividends and bonds you know 73% of the markets
bonds you know 73% of the markets
bonds you know 73% of the markets returns over the last 40 years came from
returns over the last 40 years came from
returns over the last 40 years came from dividends not capital appreciation and
dividends not capital appreciation and
dividends not capital appreciation and she knew that intuitively so that’s how
she knew that intuitively so that’s how
she knew that intuitively so that’s how we built the foundation of O’Leary funds
we built the foundation of O’Leary funds
we built the foundation of O’Leary funds we listened to mom we don’t own a single
we listened to mom we don’t own a single
we listened to mom we don’t own a single security that doesn’t pay a dividend I
security that doesn’t pay a dividend I
security that doesn’t pay a dividend I will never buy a stock in my life that
will never buy a stock in my life that
will never buy a stock in my life that doesn’t pay a dividend it’s not
doesn’t pay a dividend it’s not
doesn’t pay a dividend it’s not returning cash to me it’s a speculation
returning cash to me it’s a speculation
returning cash to me it’s a speculation and if a manager can’t send me cash I’m
and if a manager can’t send me cash I’m
and if a manager can’t send me cash I’m not interested if you have a 401k match
not interested if you have a 401k match
not interested if you have a 401k match you don’t do it for as much as you can
you don’t do it for as much as you can
you don’t do it for as much as you can possibly force yourself to do you’re an
possibly force yourself to do you’re an
possibly force yourself to do you’re an idiot if you don’t have a 401k then
idiot if you don’t have a 401k then
idiot if you don’t have a 401k then there’s so many esoteric dumbass banking
there’s so many esoteric dumbass banking
there’s so many esoteric dumbass banking rules right where you can’t just put ten
rules right where you can’t just put ten
rules right where you can’t just put ten dollars or 20 dollars into the bank
dollars or 20 dollars into the bank
dollars or 20 dollars into the bank because of all the service fees they’re
because of all the service fees they’re
because of all the service fees they’re gonna crush you right and so there’s a
gonna crush you right and so there’s a
gonna crush you right and so there’s a variety of new things and opportunities
variety of new things and opportunities
variety of new things and opportunities that are coming up where if you can get
that are coming up where if you can get
that are coming up where if you can get yourself to put in $10 a week $20 a week
yourself to put in $10 a week $20 a week
yourself to put in $10 a week $20 a week $100 a month if you’re 21 and you put in
$100 a month if you’re 21 and you put in
$100 a month if you’re 21 and you put in a hundred dollars a month and you put it
a hundred dollars a month and you put it
a hundred dollars a month and you put it into a vanguard index fund let’s say
into a vanguard index fund let’s say
into a vanguard index fund let’s say hopefully you’ll be able to increase
hopefully you’ll be able to increase
hopefully you’ll be able to increase those amounts and so literally if you
those amounts and so literally if you
those amounts and so literally if you can train yourself to save a hundred
can train yourself to save a hundred
can train yourself to save a hundred bucks a month and grow it as you earn
bucks a month and grow it as you earn
bucks a month and grow it as you earn more you’re gonna be a millionaire by
more you’re gonna be a millionaire by
more you’re gonna be a millionaire by the time you retire if you don’t you’re
the time you retire if you don’t you’re
the time you retire if you don’t you’re gonna be in the same boat I was at 27
gonna be in the same boat I was at 27
gonna be in the same boat I was at 27 and broke or trying to figure it out or
and broke or trying to figure it out or
and broke or trying to figure it out or you know others at 50 or 60 will have
you know others at 50 or 60 will have
you know others at 50 or 60 will have nothing the opportunities exist and if
nothing the opportunities exist and if
nothing the opportunities exist and if you can invest in just a you know a
you can invest in just a you know a
you can invest in just a you know a stock index fund SPX bond and guard I
stock index fund SPX bond and guard I
stock index fund SPX bond and guard I mentioned because it’s the lowest cost
mentioned because it’s the lowest cost
mentioned because it’s the lowest cost do it do it do it do it do it do it –
do it do it do it do it do it do it –
do it do it do it do it do it do it – les Pierce know these days one less be
les Pierce know these days one less be
les Pierce know these days one less be one less fireball shot and you can be
one less fireball shot and you can be
one less fireball shot and you can be rich have those first five fireballs but
rich have those first five fireballs but
rich have those first five fireballs but that was last – for the private
that was last – for the private
that was last – for the private investors especially in the venture
investors especially in the venture
investors especially in the venture capital industry what would you think is
capital industry what would you think is
capital industry what would you think is the most important thing the key
the most important thing the key
the most important thing the key evaluating a company it’s we’re not I’m
evaluating a company it’s we’re not I’m
evaluating a company it’s we’re not I’m not asking about doing mediocre and not
not asking about doing mediocre and not
not asking about doing mediocre and not asking about being average but about
asking about being average but about
asking about being average but about excellent remarkable just name one thing
excellent remarkable just name one thing
excellent remarkable just name one thing the
the
the the most important thing is to the side
the most important thing is to the side
the most important thing is to the side is to be able to define which ones you
is to be able to define which ones you
is to be able to define which ones you can come to an intelligent decision on
can come to an intelligent decision on
can come to an intelligent decision on and which ones are beyond your capacity
and which ones are beyond your capacity
and which ones are beyond your capacity to evaluate you don’t have to be right
to evaluate you don’t have to be right
to evaluate you don’t have to be right about thousands and thousands of
about thousands and thousands of
about thousands and thousands of thousands of competition you only have
thousands of competition you only have
thousands of competition you only have to be right about a company couple I met
to be right about a company couple I met
to be right about a company couple I met Bill Gates on July 5th 1991 we arrived
Bill Gates on July 5th 1991 we arrived
Bill Gates on July 5th 1991 we arrived Seattle and Bill said you’ve got to have
Seattle and Bill said you’ve got to have
Seattle and Bill said you’ve got to have a computer and I said why and he said
a computer and I said why and he said
a computer and I said why and he said well he said you can do your income tax
well he said you can do your income tax
well he said you can do your income tax on it I said I don’t have any income
on it I said I don’t have any income
on it I said I don’t have any income Bircher doesn’t pay a dividend yeah he
Bircher doesn’t pay a dividend yeah he
Bircher doesn’t pay a dividend yeah he said well you can keep track of your
said well you can keep track of your
said well you can keep track of your portfolio I said I only have one stock I
portfolio I said I only have one stock I
portfolio I said I only have one stock I said I did I mean he says it’s gonna
said I did I mean he says it’s gonna
said I did I mean he says it’s gonna change everything and I said well will
change everything and I said well will
change everything and I said well will it change whether people chew gum and he
it change whether people chew gum and he
it change whether people chew gum and he said well probably not and I said what
said well probably not and I said what
said well probably not and I said what will change what kind of gum they show
will change what kind of gum they show
will change what kind of gum they show and I said well then I’ll stick to
and I said well then I’ll stick to
and I said well then I’ll stick to chewing gum and you stick to computers
chewing gum and you stick to computers
chewing gum and you stick to computers how bad I don’t have to understand all
how bad I don’t have to understand all
how bad I don’t have to understand all kinds of but there’s all kinds of
kinds of but there’s all kinds of
kinds of but there’s all kinds of business I don’t understand but there’s
business I don’t understand but there’s
business I don’t understand but there’s thousands of opportunities there I
thousands of opportunities there I
thousands of opportunities there I didn’t understand the Bank of America
didn’t understand the Bank of America
didn’t understand the Bank of America you know and and I’ll be able I’m able
you know and and I’ll be able I’m able
you know and and I’ll be able I’m able to do that I’m able to understand some
to do that I’m able to understand some
to do that I’m able to understand some given percentage but Ted Williams wrote
given percentage but Ted Williams wrote
given percentage but Ted Williams wrote a book called the science of hitting and
a book called the science of hitting and
a book called the science of hitting and in science of hitting he’s got a diagram
in science of hitting he’s got a diagram
in science of hitting he’s got a diagram shows him at the plate and he’s got the
shows him at the plate and he’s got the
shows him at the plate and he’s got the strike zone divided in the seventy-seven
strike zone divided in the seventy-seven
strike zone divided in the seventy-seven squares each the size of a baseball and
squares each the size of a baseball and
squares each the size of a baseball and he says if I only swing it pitches in my
he says if I only swing it pitches in my
he says if I only swing it pitches in my sweet zone which he shows there and he
sweet zone which he shows there and he
sweet zone which he shows there and he has what his batting average would be
has what his batting average would be
has what his batting average would be which is 400 if he had to swing at low
which is 400 if he had to swing at low
which is 400 if he had to swing at low outside pitches but still in the in the
outside pitches but still in the in the
outside pitches but still in the in the strike zone
strike zone
strike zone his average would be 230 he said the
his average would be 230 he said the
his average would be 230 he said the most important thing in hitting is
most important thing in hitting is
most important thing in hitting is waiting for the right pitch now he was
waiting for the right pitch now he was
waiting for the right pitch now he was at a disadvantage because if the count
at a disadvantage because if the count
at a disadvantage because if the count was oh and two or one and two or and so
was oh and two or one and two or and so
was oh and two or one and two or and so on even if that ball was down where he
on even if that ball was down where he
on even if that ball was down where he was only going about 230 he had to swing
was only going about 230 he had to swing
was only going about 230 he had to swing at it in investing there’s no called
at it in investing there’s no called
at it in investing there’s no called strikes people can throw Microsoft that
strikes people can throw Microsoft that
strikes people can throw Microsoft that man you know you name it any any stock
man you know you name it any any stock
man you know you name it any any stock General Motors
General Motors
General Motors and I don’t have to swing yeah nobody’s
and I don’t have to swing yeah nobody’s
and I don’t have to swing yeah nobody’s gonna call me out on calls
gonna call me out on calls
gonna call me out on calls I only get a strike called if I swing at
I only get a strike called if I swing at
I only get a strike called if I swing at a pitch and miss so I can wait there and
a pitch and miss so I can wait there and
a pitch and miss so I can wait there and look at thousands of companies day after
look at thousands of companies day after
look at thousands of companies day after day and only when I see something I
day and only when I see something I
day and only when I see something I understand and when I like the price of
understand and when I like the price of
understand and when I like the price of which is selling then if I swing if I if
which is selling then if I swing if I if
which is selling then if I swing if I if I had it fine if I miss it it’s it’s
I had it fine if I miss it it’s it’s
I had it fine if I miss it it’s it’s it’s a strike but it’s an enormous ly
it’s a strike but it’s an enormous ly
it’s a strike but it’s an enormous ly advantageous game and it’s a terrible
advantageous game and it’s a terrible
advantageous game and it’s a terrible mistake
mistake
mistake that think you have to have an opinion
that think you have to have an opinion
that think you have to have an opinion on everything you only have to have an
on everything you only have to have an
on everything you only have to have an opinion on a few things in fact I’ve
opinion on a few things in fact I’ve
opinion on a few things in fact I’ve told students if when they got out of
told students if when they got out of
told students if when they got out of school they got a punch card with 20
school they got a punch card with 20
school they got a punch card with 20 punches on it and that’s all the
punches on it and that’s all the
punches on it and that’s all the investment decisions they got to make in
investment decisions they got to make in
investment decisions they got to make in their entire life they would get very
their entire life they would get very
their entire life they would get very rich because they would think very hard
rich because they would think very hard
rich because they would think very hard about each one and you don’t need 20
about each one and you don’t need 20
about each one and you don’t need 20 right decisions to get very rich you
right decisions to get very rich you
right decisions to get very rich you know four or five will probably do it
know four or five will probably do it
know four or five will probably do it over time so I don’t worry too much
over time so I don’t worry too much
over time so I don’t worry too much about the things I don’t understand if
about the things I don’t understand if
about the things I don’t understand if you understand some of these businesses
you understand some of these businesses
you understand some of these businesses that are coming along and can spot
that are coming along and can spot
that are coming along and can spot things on if you can spot on Amazon for
things on if you can spot on Amazon for
things on if you can spot on Amazon for example I mean it’s a tremendous
example I mean it’s a tremendous
example I mean it’s a tremendous accomplishment what Jeff Bezos has done
accomplishment what Jeff Bezos has done
accomplishment what Jeff Bezos has done and I tip my hat to me is a wonderful
and I tip my hat to me is a wonderful
and I tip my hat to me is a wonderful businessman he’s a good guy too but
businessman he’s a good guy too but
businessman he’s a good guy too but could I have anticipated that he would
could I have anticipated that he would
could I have anticipated that he would be the success and ten others wouldn’t
be the success and ten others wouldn’t
be the success and ten others wouldn’t be I’m not good enough to do that but I
be I’m not good enough to do that but I
be I’m not good enough to do that but I done fortunately I don’t have to you
done fortunately I don’t have to you
done fortunately I don’t have to you know I don’t have to form an opinion on
know I don’t have to form an opinion on
know I don’t have to form an opinion on on Amazon and I did I did form an
on Amazon and I did I did form an
on Amazon and I did I did form an opinion on the Bank of America and I
opinion on the Bank of America and I
opinion on the Bank of America and I form an opinion on coca-cola
form an opinion on coca-cola
form an opinion on coca-cola I mean coca-cola has been around since
I mean coca-cola has been around since
I mean coca-cola has been around since 1886
1886
1886 there’s 1.8 billion 1.8 billion 8 ounce
there’s 1.8 billion 1.8 billion 8 ounce
there’s 1.8 billion 1.8 billion 8 ounce servings of coca-cola products sold
servings of coca-cola products sold
servings of coca-cola products sold every day now if you take one penny and
every day now if you take one penny and
every day now if you take one penny and get one penny extra that’s 18 million
get one penny extra that’s 18 million
get one penny extra that’s 18 million dollars a day and 18 million times 365
dollars a day and 18 million times 365
dollars a day and 18 million times 365 is 7 billion 3 less 730 billion or 6
is 7 billion 3 less 730 billion or 6
is 7 billion 3 less 730 billion or 6 billion 570 million dollars so annually
billion 570 million dollars so annually
billion 570 million dollars so annually 6 billion 570 million dollars from one
6 billion 570 million dollars from one
6 billion 570 million dollars from one penny do you think coca-cola is worth a
penny do you think coca-cola is worth a
penny do you think coca-cola is worth a penny more than you know Joe’s Cola I
penny more than you know Joe’s Cola I
penny more than you know Joe’s Cola I think so so you know and I’ve got about
think so so you know and I’ve got about
think so so you know and I’ve got about 127 years of history they would indicate
127 years of history they would indicate
127 years of history they would indicate it so those are the kind of
it so those are the kind of
it so those are the kind of decisions I like to make and you may
decisions I like to make and you may
decisions I like to make and you may have an entirely different field of
have an entirely different field of
have an entirely different field of expertise then I would have and probably
expertise then I would have and probably
expertise then I would have and probably much more up to date in terms of the
much more up to date in terms of the
much more up to date in terms of the kind of businesses that we’re seeing
kind of businesses that we’re seeing
kind of businesses that we’re seeing about and you can get very rich if you
about and you can get very rich if you
about and you can get very rich if you just understand the feel of them and
just understand the feel of them and
just understand the feel of them and understand their future
understand their future
understand their future well the freedom fund is this idea
well the freedom fund is this idea
well the freedom fund is this idea nobody wants to save right and
nobody wants to save right and
nobody wants to save right and Millennials right now are do the worst
Millennials right now are do the worst
Millennials right now are do the worst job of it a long time and it’s not
job of it a long time and it’s not
job of it a long time and it’s not because they don’t care they’re
because they don’t care they’re
because they don’t care they’re irresponsible to Frank Lee they don’t
irresponsible to Frank Lee they don’t
irresponsible to Frank Lee they don’t trust the market you know they saw what
trust the market you know they saw what
trust the market you know they saw what happened in 2008 they don’t know where
happened in 2008 they don’t know where
happened in 2008 they don’t know where to really to go and so they’re being
to really to go and so they’re being
to really to go and so they’re being stimulated like crazy and they’re
stimulated like crazy and they’re
stimulated like crazy and they’re spending like crazy but if you really
spending like crazy but if you really
spending like crazy but if you really want to have freedom that what you have
want to have freedom that what you have
want to have freedom that what you have to do is you’ve got to take that
to do is you’ve got to take that
to do is you’ve got to take that percentage aside like Theodore Johnson
percentage aside like Theodore Johnson
percentage aside like Theodore Johnson dead and you got to just say this is for
dead and you got to just say this is for
dead and you got to just say this is for me this is my friend there’s a part of
me this is my friend there’s a part of
me this is my friend there’s a part of what I earn as basic as it is we all
what I earn as basic as it is we all
what I earn as basic as it is we all know there’s some investing it’s a part
know there’s some investing it’s a part
know there’s some investing it’s a part of what I earned that it’s mine and my
of what I earned that it’s mine and my
of what I earned that it’s mine and my family’s to keep and no one’s going to
family’s to keep and no one’s going to
family’s to keep and no one’s going to touch it I’m going to grow it and but I
touch it I’m going to grow it and but I
touch it I’m going to grow it and but I also believe that where you put that
also believe that where you put that
also believe that where you put that really matters and so indexing is the
really matters and so indexing is the
really matters and so indexing is the most basic way to do it for sure but
most basic way to do it for sure but
most basic way to do it for sure but what all these investors showed me is
what all these investors showed me is
what all these investors showed me is asset allocation is where the difference
asset allocation is where the difference
asset allocation is where the difference is in business right in life if you look
is in business right in life if you look
is in business right in life if you look at it the fourth key we talk about and
at it the fourth key we talk about and
at it the fourth key we talk about and the four steps is you got to really
the four steps is you got to really
the four steps is you got to really understand asset allocation because when
understand asset allocation because when
understand asset allocation because when I was with David Swensen David said Tony
I was with David Swensen David said Tony
I was with David Swensen David said Tony I said what are the dials you can move
I said what are the dials you can move
I said what are the dials you can move there’s a limited number of dollars you
there’s a limited number of dollars you
there’s a limited number of dollars you can move to increase your returns to get
can move to increase your returns to get
can move to increase your returns to get to your financial freedom faster he says
to your financial freedom faster he says
to your financial freedom faster he says there’s really only three he said you
there’s really only three he said you
there’s really only three he said you can make a better choice selection of
can make a better choice selection of
can make a better choice selection of the actual investments of the securities
the actual investments of the securities
the actual investments of the securities you can have better timing or you got a
you can have better timing or you got a
you can have better timing or you got a better asset allocation so let me give
better asset allocation so let me give
better asset allocation so let me give you a clue the first two will never
you a clue the first two will never
you a clue the first two will never happen he said because they cost money
happen he said because they cost money
happen he said because they cost money if you get them from somebody else and
if you get them from somebody else and
if you get them from somebody else and everybody’s wrong on timing everybody’s
everybody’s wrong on timing everybody’s
everybody’s wrong on timing everybody’s wrong in the stocks this is where all
wrong in the stocks this is where all
wrong in the stocks this is where all your money is made is that this leads to
your money is made is that this leads to
your money is made is that this leads to what sound goes against all the
what sound goes against all the
what sound goes against all the conventional wisdom what you call
conventional wisdom what you call
conventional wisdom what you call all-weather allocation yeah well let’s
all-weather allocation yeah well let’s
all-weather allocation yeah well let’s talk about that that’s which stocks only
talk about that that’s which stocks only
talk about that that’s which stocks only 30 percent yes explain yes well I sat
30 percent yes explain yes well I sat
30 percent yes explain yes well I sat down with the famous Ray Dalio
down with the famous Ray Dalio
down with the famous Ray Dalio right right and I prepared for 18 hours
right right and I prepared for 18 hours
right right and I prepared for 18 hours for that interview because he’s a genius
for that interview because he’s a genius
for that interview because he’s a genius and there’s not that much on him I
and there’s not that much on him I
and there’s not that much on him I wanted to absorb it all so I got every
wanted to absorb it all so I got every
wanted to absorb it all so I got every little bit of it sat down with it turned
little bit of it sat down with it turned
little bit of it sat down with it turned out ray was a fan of my work which I was
out ray was a fan of my work which I was
out ray was a fan of my work which I was touched by 20 years ago I guess he
touched by 20 years ago I guess he
touched by 20 years ago I guess he listened to my programs he was very
listened to my programs he was very
listened to my programs he was very generous with his time and we spent
generous with his time and we spent
generous with his time and we spent these three hours and in the three hours
these three hours and in the three hours
these three hours and in the three hours when I got to the end I said
when I got to the end I said
when I got to the end I said and said listen I really want help the
and said listen I really want help the
and said listen I really want help the average person so I got a question for
average person so I got a question for
average person so I got a question for you I did this with everyone I said if
you I did this with everyone I said if
you I did this with everyone I said if you couldn’t give your money to your
you couldn’t give your money to your
you couldn’t give your money to your children any of it and all you could do
children any of it and all you could do
children any of it and all you could do would be give them a portfolio or a set
would be give them a portfolio or a set
would be give them a portfolio or a set of investment strategies or instructions
of investment strategies or instructions
of investment strategies or instructions and they were going to start over and
and they were going to start over and
and they were going to start over and build it what would it be nice to Tony
build it what would it be nice to Tony
build it what would it be nice to Tony I spent a decade figuring that out all
I spent a decade figuring that out all
I spent a decade figuring that out all my money is already there my kids money
my money is already there my kids money
my money is already there my kids money is there my money philanthropy when i’m
is there my money philanthropy when i’m
is there my money philanthropy when i’m gone is there cuz i’m not gonna be here
gone is there cuz i’m not gonna be here
gone is there cuz i’m not gonna be here and i want something that’ll do well in
and i want something that’ll do well in
and i want something that’ll do well in the future and i don’t know what the
the future and i don’t know what the
the future and i don’t know what the future is gonna be markets are gonna
future is gonna be markets are gonna
future is gonna be markets are gonna always change i need something they
always change i need something they
always change i need something they could work in any mark and I call it my
could work in any mark and I call it my
could work in any mark and I call it my all weather fund most of us in the
all weather fund most of us in the
all weather fund most of us in the business are familiar with it a little
business are familiar with it a little
business are familiar with it a little bit and so he explained it to me and I
bit and so he explained it to me and I
bit and so he explained it to me and I have a good understanding and I said I
have a good understanding and I said I
have a good understanding and I said I get it so what you’re saying is the
get it so what you’re saying is the
get it so what you’re saying is the reason why this was obsessed him why is
reason why this was obsessed him why is
reason why this was obsessed him why is he defined the balance portfolio in 2008
he defined the balance portfolio in 2008
he defined the balance portfolio in 2008 I got nailed on both sides why did that
I got nailed on both sides why did that
I got nailed on both sides why did that happen in 2000 everybody says portfolio
happen in 2000 everybody says portfolio
happen in 2000 everybody says portfolio theory this is supposed to protect me
theory this is supposed to protect me
theory this is supposed to protect me and it didn’t work but he said as soon
and it didn’t work but he said as soon
and it didn’t work but he said as soon as things get better no one talks about
as things get better no one talks about
as things get better no one talks about it we just forget about it happens again
it we just forget about it happens again
it we just forget about it happens again happened in 2000 happened in 2008 he
happened in 2000 happened in 2008 he
happened in 2000 happened in 2008 he said I figured it out
said I figured it out
said I figured it out when you have a 50/50 portfolio right
when you have a 50/50 portfolio right
when you have a 50/50 portfolio right that’s 50/50 of where you put your money
that’s 50/50 of where you put your money
that’s 50/50 of where you put your money in assets 6040 5050 however you look at
in assets 6040 5050 however you look at
in assets 6040 5050 however you look at balanced portfolio right but he said the
balanced portfolio right but he said the
balanced portfolio right but he said the problem is that’s not balanced risk this
problem is that’s not balanced risk this
problem is that’s not balanced risk this is where people are crazy I’ve seen
is where people are crazy I’ve seen
is where people are crazy I’ve seen people write things up they see this in
people write things up they see this in
people write things up they see this in the book and say Tony Robbins is
the book and say Tony Robbins is
the book and say Tony Robbins is promoting first I’m not promoting
promoting first I’m not promoting
promoting first I’m not promoting anything every word in this book is from
anything every word in this book is from
anything every word in this book is from the best investors on earth anything
the best investors on earth anything
the best investors on earth anything it’s from me is about the emotions that
it’s from me is about the emotions that
it’s from me is about the emotions that I know for 36 years that’s been my
I know for 36 years that’s been my
I know for 36 years that’s been my expertise these are their views but I’ll
expertise these are their views but I’ll
expertise these are their views but I’ll tell you what’s amazing
tell you what’s amazing
tell you what’s amazing he’s a Tony when you have stocks and
he’s a Tony when you have stocks and
he’s a Tony when you have stocks and bonds half and half you’re not equal
bonds half and half you’re not equal
bonds half and half you’re not equal because equities are three times more
because equities are three times more
because equities are three times more volatile so your risk is ninety five
volatile so your risk is ninety five
volatile so your risk is ninety five five he said so that’s why people get
five he said so that’s why people get
five he said so that’s why people get killed in 2008 he said I try to get this
killed in 2008 he said I try to get this
killed in 2008 he said I try to get this through to people he said but all of our
through to people he said but all of our
through to people he said but all of our people handle it you know you manage
people handle it you know you manage
people handle it you know you manage money for countries the largest you know
money for countries the largest you know
money for countries the largest you know pension funds on earth he said but
pension funds on earth he said but
pension funds on earth he said but people don’t listen they look at it go
people don’t listen they look at it go
people don’t listen they look at it go oh this is bond heavy the bond days are
oh this is bond heavy the bond days are
oh this is bond heavy the bond days are over because inflation is going forward
over because inflation is going forward
over because inflation is going forward he said it’s not true Tony this fund in
he said it’s not true Tony this fund in
he said it’s not true Tony this fund in the 1970s it was the worst time for
the 1970s it was the worst time for
the 1970s it was the worst time for bonds it was an extraordinary time for
bonds it was an extraordinary time for
bonds it was an extraordinary time for all weather because it isn’t it looks
all weather because it isn’t it looks
all weather because it isn’t it looks over balanced because we already get the
over balanced because we already get the
over balanced because we already get the same level of risk you have to go for
same level of risk you have to go for
same level of risk you have to go for more long-term bonds or you have to use
more long-term bonds or you have to use
more long-term bonds or you have to use more leverage on the bond side and so
more leverage on the bond side and so
more leverage on the bond side and so when he was all done it was you know for
when he was all done it was you know for
when he was all done it was you know for the average person complex I’m seeing
the average person complex I’m seeing
the average person complex I’m seeing financial people look at this and write
financial people look at this and write
financial people look at this and write things up that are just silly saying
things up that are just silly saying
things up that are just silly saying says this is never gonna work as we’re
says this is never gonna work as we’re
says this is never gonna work as we’re in the you know interest rates you know
in the you know interest rates you know
in the you know interest rates you know the only place to go if he treats go up
the only place to go if he treats go up
the only place to go if he treats go up it’s a balance fund the other areas kick
it’s a balance fund the other areas kick
it’s a balance fund the other areas kick in but here’s what’s interesting I think
in but here’s what’s interesting I think
in but here’s what’s interesting I think told the whole thing to me I said to him
told the whole thing to me I said to him
told the whole thing to me I said to him I said look I said this is wonderful you
I said look I said this is wonderful you
I said look I said this is wonderful you give me something that very few people
give me something that very few people
give me something that very few people understand on the planet I think I
understand on the planet I think I
understand on the planet I think I really got it and I played it back to he
really got it and I played it back to he
really got it and I played it back to he said you got it
said you got it
said you got it I said there’s the problem the average
I said there’s the problem the average
I said there’s the problem the average person is never gonna know what to do
person is never gonna know what to do
person is never gonna know what to do with this and I said I’m trying to help
with this and I said I’m trying to help
with this and I said I’m trying to help somebody that needs to know what to do I
somebody that needs to know what to do I
somebody that needs to know what to do I said tell me you’re telling me to make
said tell me you’re telling me to make
said tell me you’re telling me to make this beautiful chocolate cake and you’re
this beautiful chocolate cake and you’re
this beautiful chocolate cake and you’re saying Tony here’s how to do it here’s
saying Tony here’s how to do it here’s
saying Tony here’s how to do it here’s some sugar right use some chocolate use
some sugar right use some chocolate use
some sugar right use some chocolate use some dairy products I need know the
some dairy products I need know the
some dairy products I need know the amounts you know give me the amounts
amounts you know give me the amounts
amounts you know give me the amounts egos tell me that’s my secret sauce and
egos tell me that’s my secret sauce and
egos tell me that’s my secret sauce and that’s when he told me he said look 10
that’s when he told me he said look 10
that’s when he told me he said look 10 years ago for you to even get into talk
years ago for you to even get into talk
years ago for you to even get into talk to me it was 5 billion net worth a
to me it was 5 billion net worth a
to me it was 5 billion net worth a hundred million dollars of getting it
hundred million dollars of getting it
hundred million dollars of getting it Michael and he said and now for 10 years
Michael and he said and now for 10 years
Michael and he said and now for 10 years I haven’t taken anybody’s money and she
I haven’t taken anybody’s money and she
I haven’t taken anybody’s money and she answered your own question I said you’re
answered your own question I said you’re
answered your own question I said you’re not taking money anyway it’s not gonna
not taking money anyway it’s not gonna
not taking money anyway it’s not gonna compete with you the average guy he says
compete with you the average guy he says
compete with you the average guy he says never gonna make it talking to a wealth
never gonna make it talking to a wealth
never gonna make it talking to a wealth manager tell me what to do and he is so
manager tell me what to do and he is so
manager tell me what to do and he is so generous you know he’s giving up half
generous you know he’s giving up half
generous you know he’s giving up half his net worth like many other people and
his net worth like many other people and
his net worth like many other people and and in the end he said ok said of but
and in the end he said ok said of but
and in the end he said ok said of but it’ll be complex I said I can make it
it’ll be complex I said I can make it
it’ll be complex I said I can make it simple he said well I don’t want
simple he said well I don’t want
simple he said well I don’t want leverage and I said design without
leverage and I said design without
leverage and I said design without leverage because it won’t be perfect I
leverage because it won’t be perfect I
leverage because it won’t be perfect I said I don’t care if it’s not perfect
said I don’t care if it’s not perfect
said I don’t care if it’s not perfect your idea of unperfect somebody else
your idea of unperfect somebody else
your idea of unperfect somebody else idea is the best thing they could do and
idea is the best thing they could do and
idea is the best thing they could do and they lane up the numbers we ran the
they lane up the numbers we ran the
they lane up the numbers we ran the numbers and use the same back-testing so
numbers and use the same back-testing so
numbers and use the same back-testing so you saw year by year how it really did
you saw year by year how it really did
you saw year by year how it really did over the last 75 years in modern
over the last 75 years in modern
over the last 75 years in modern investing and here’s what’s amazing like
investing and here’s what’s amazing like
investing and here’s what’s amazing like all weather similar in 75 years
all weather similar in 75 years
all weather similar in 75 years it’s been right 85 percent of the time
it’s been right 85 percent of the time
it’s been right 85 percent of the time what’s even more extraordinary is the 15
what’s even more extraordinary is the 15
what’s even more extraordinary is the 15 percent what it wasn’t doing well what
percent what it wasn’t doing well what
percent what it wasn’t doing well what it knew well it’s average loss was 1.6
it knew well it’s average loss was 1.6
it knew well it’s average loss was 1.6 percent not 50 40 30 20 think in the
percent not 50 40 30 20 think in the
percent not 50 40 30 20 think in the last ten years the to 50 percent hits
last ten years the to 50 percent hits
last ten years the to 50 percent hits his biggest loss in 75 years was less
his biggest loss in 75 years was less
his biggest loss in 75 years was less than 4% minus three point nine five and
than 4% minus three point nine five and
than 4% minus three point nine five and that was 2008 when the market exploded
that was 2008 when the market exploded
that was 2008 when the market exploded you know down to 51 percent here here in
you know down to 51 percent here here in
you know down to 51 percent here here in the allocations yes in the book which
the allocations yes in the book which
the allocations yes in the book which would make it a normal person gag
would make it a normal person gag
would make it a normal person gag initially the stocks only 30 percent
initially the stocks only 30 percent
initially the stocks only 30 percent that’s right even though it’s their
that’s right even though it’s their
that’s right even though it’s their stocks on average supposed to gain what
stocks on average supposed to gain what
stocks on average supposed to gain what I’m presenting yes nine point to
I’m presenting yes nine point to
I’m presenting yes nine point to long-term Treasuries 40 percent yeah
long-term Treasuries 40 percent yeah
long-term Treasuries 40 percent yeah intermediates 15 gold seven-and-a-half
intermediates 15 gold seven-and-a-half
intermediates 15 gold seven-and-a-half commodity seven and a half yeah
commodity seven and a half yeah
commodity seven and a half yeah absolutely counter wisdom I know it’s
absolutely counter wisdom I know it’s
absolutely counter wisdom I know it’s amazing
amazing
amazing you know
you know
you know interviewed David Swensen he said he
interviewed David Swensen he said he
interviewed David Swensen he said he wrote a book and when he said the whole
wrote a book and when he said the whole
wrote a book and when he said the whole secret to success is to be contrary to
secret to success is to be contrary to
secret to success is to be contrary to what else believes but the math on this
what else believes but the math on this
what else believes but the math on this is what works here’s what’s interesting
is what works here’s what’s interesting
is what works here’s what’s interesting that looks like your heavy bronze forty
that looks like your heavy bronze forty
that looks like your heavy bronze forty and fifteen fifty five percent bonds and
and fifteen fifty five percent bonds and
and fifteen fifty five percent bonds and it looks that way visually in terms of
it looks that way visually in terms of
it looks that way visually in terms of volume you are panned in terms of risk
volume you are panned in terms of risk
volume you are panned in terms of risk you’re not you’re still you’re making us
you’re not you’re still you’re making us
you’re not you’re still you’re making us you’re equally way to think of it this
you’re equally way to think of it this
you’re equally way to think of it this way what triggers things to grow is
way what triggers things to grow is
way what triggers things to grow is inflation or deflation in terms of price
inflation or deflation in terms of price
inflation or deflation in terms of price certain things do really well in
certain things do really well in
certain things do really well in inflation certain to deflation growing
inflation certain to deflation growing
inflation certain to deflation growing economy shrinking economy he’s figured
economy shrinking economy he’s figured
economy shrinking economy he’s figured out which quadrant you need to put each
out which quadrant you need to put each
out which quadrant you need to put each to actually have equal risk and that’s
to actually have equal risk and that’s
to actually have equal risk and that’s why it’s not well this year this formula
why it’s not well this year this formula
why it’s not well this year this formula has done it’s one percent better than
has done it’s one percent better than
has done it’s one percent better than the markets in thirteen and the third
the markets in thirteen and the third
the markets in thirteen and the third right now and but more importantly three
right now and but more importantly three
right now and but more importantly three weeks ago in the market drop two gave up
weeks ago in the market drop two gave up
weeks ago in the market drop two gave up all of its entire benefits for the
all of its entire benefits for the
all of its entire benefits for the entire year and everybody’s guts were
entire year and everybody’s guts were
entire year and everybody’s guts were checking there was no gut check because
checking there was no gut check because
checking there was no gut check because they went up a quarter of a point so the
they went up a quarter of a point so the
they went up a quarter of a point so the beauty of this is I’m sure you know
beauty of this is I’m sure you know
beauty of this is I’m sure you know there’s Studies on the last twenty years
there’s Studies on the last twenty years
there’s Studies on the last twenty years and the studies from 1993 to 2013 and
and the studies from 1993 to 2013 and
and the studies from 1993 to 2013 and spied Albar and they found that the
spied Albar and they found that the
spied Albar and they found that the market is sp500 during that time did
market is sp500 during that time did
market is sp500 during that time did nine point two percent on average just
nine point two percent on average just
nine point two percent on average just as you said but you know what the
as you said but you know what the
as you said but you know what the average mutual fund men now owner dot
average mutual fund men now owner dot
average mutual fund men now owner dot invested two point five percent that’s
invested two point five percent that’s
invested two point five percent that’s before tax why because we as investors
before tax why because we as investors
before tax why because we as investors always do the wrong thing emotionally
always do the wrong thing emotionally
always do the wrong thing emotionally that’s right we sell we should hang on
that’s right we sell we should hang on
that’s right we sell we should hang on we buy when we shouldn’t so the greatest
we buy when we shouldn’t so the greatest
we buy when we shouldn’t so the greatest thing that I think that Ray offers
thing that I think that Ray offers
thing that I think that Ray offers somebody the opportunity to do is
somebody the opportunity to do is
somebody the opportunity to do is actually stay in the hood because if you
actually stay in the hood because if you
actually stay in the hood because if you go yeah if you got one point six percent
go yeah if you got one point six percent
go yeah if you got one point six percent as your big here they’re four percent
as your big here they’re four percent
as your big here they’re four percent was the biggest hit you’ve ever seen at
was the biggest hit you’ve ever seen at
was the biggest hit you’ve ever seen at seventy five years I think you could
seventy five years I think you could
seventy five years I think you could stay in and you can do a jack talks
stay in and you can do a jack talks
stay in and you can do a jack talks about will just stay in that market
about will just stay in that market
about will just stay in that market through time
through time
through time this means resetting each year it’s a
this means resetting each year it’s a
this means resetting each year it’s a reset once a year that’s the one
reset once a year that’s the one
reset once a year that’s the one recalibration so fifteen minutes a year
recalibration so fifteen minutes a year
recalibration so fifteen minutes a year and you’re in the game thank you for
and you’re in the game thank you for
and you’re in the game thank you for watching we made this video because
watching we made this video because
watching we made this video because Fatih for you asked us to so there’s a
Fatih for you asked us to so there’s a
Fatih for you asked us to so there’s a topic you’d like us to cover in the next
topic you’d like us to cover in the next
topic you’d like us to cover in the next edition of believe life leave it below
edition of believe life leave it below
edition of believe life leave it below and we’ll see what we can do thanks for
and we’ll see what we can do thanks for
and we’ll see what we can do thanks for watching have an amazing day and
watching have an amazing day and
watching have an amazing day and continue to believe mo sees
”
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