Rockstar Book Review: "Unshakeable"

This is part of our Rockstar Book Review series. Be sure to check out all previous books we’ve covered!

"Unshakeable" by Tony Robbins

Who it’s for: If you're looking for a one-two-punch of a book that covers behavioral economics/investor psychology and the fundamentals of investing, this is the book for you.

Readability: HIGH. The book is under 200 pages (not counting the appendix). It's perfect for those among us who don't find it easy to get through a work of non-fiction, not to mention a book on investing. In it, Robbins highlights important passages for ease of skimming. He also makes good use of quotes and cartoons or illustrations throughout, to help drive his points home. What I liked about it: Tony Robbins writes books that sell. Not only because of his name and reputation, but because of his conversational writing style. He presents concepts and ideas in a way that most of us can understand in one go, and he ensures the sources he quotes are solid. And who can argue with the insights he shares in this book when they're based on interviews with over fifty "masters of the financial universe" such as Bogle, Buffett and Graham? I also appreciated the fact that "Unshakeable" includes the same fundamental information as "MONEY: Master the Game" in a quarter of the volume. Robbins saw the opportunity to publish a book on investing that more people would read, and that could possibly be the gateway drug that could entice readers to then pick up the more involved tome. A good move for all stakeholders, as far as I can tell. What I didn’t like about it: Robbins is the ultimate salesman and this book is no exception. I appreciate the fact that all profits from this book go towards his efforts to provide free meals to those in need. However, that doesn't mean I appreciate being sold repeatedly the idea that I should use the services of the wealth management firm he is associated with. Yes, they have a great reputation. Yes, they are recognized as being among the best. Yes, they act as fiduciaries. Yes, they can offer a second opinion. Yes, yes, yes...now can we get back to the book!? This constant selling is the primary reason this book did not get a 5-star rating. I also thought it peculiar that the author would include a section on the psychology of wealth. I ended up appreciating it, but I thought it would have been better as a standalone volume or maybe its inclusion could have been more seamless. It just seemed to come out of nowhere, though I suspect it made the cut because of Robbins's role as "Chief of Investor Psychology" for the company he kept pushing throughout the book.

Where to find it:

Amazon @ $15.56 || Free @ the library

“Unshakeable: Your Financial Freedom Playbook" Distills Top Drawer Investment Advice Down to the Bare Essentials

Most investment books are long, dry and overly complicated for most fledgling investors, not to mention their more seasoned counterparts. Unfortunately, complexity can easily cloud fundamentals. This is not the case in this book. The reader gets the straight goods: the basic information needed to be successful and the reasons why the information represents sound advice. The book is organized in three sections:

The rule book on wealth that addresses market uncertainty and the fear of crashes, along with the real impact fees have on our returns and what we can do about it
How to select investments and how to diversify in a way that insulates us from market volatility and risk
How to overcome our tendencies to become our own worst enemy when it comes to building and protecting our wealth

#1. Addressing Uncertainty and What Erodes Returns

To say we are living in interesting times would be an understatement. Robbins addresses this fact up front. From the 2008-2009 crash to the continued unsettling nature of U.S. politics these days, it's no surprise that an investment book written in 2016 and released in 2017 needed to address market uncertainty overall. The author used history and advice from five-star investors to help us understand that even in turbulent times, our reality is not much different than other times in history. Despite this, markets have a tendency to continue on a positive trend overall, as long as investors stay in the market over the long-term. It can feel as though it requires nerves of steel, but nerves of steel are only required if we keep constant tabs on the market and listen to the loud investment gurus featured on television. His advice is to not pay attention to the market unless you're making decisions, such as rebalancing your portfolio on a yearly basis, because the constant ups and downs can drive us crazy. Plus, if we're in it for the long-term, the short-term ups and downs are inconsequential. The second thing to watch for is fees. Fees are usually hidden and often egregious (yes, you are paying fees even if you think you're not). Wall Street is in business to make money and financial firms only handle your money if there's something in it for them. They are, first and foremost, out to maximize profits, just like any other corporate enterprise. We need to be informed of what the fees are (front loaded, back end, recurring, fixed, variable), as levied by the advisor, his/her firm and the fund companies in question. The total cost can be staggering, cutting an average investor's returns in half!

#2. Choosing Prudent Investments and Mitigating Volatility & Risk

An important aspect of finding the right investments is where we're getting our advice. Fiduciaries are the only source we can trust for unbiased advice, but not all financial advisers are fiduciaries. In fact, the vast majority of financial advisors are brokers, which means we're asking salespeople for advice. As Buffett would say, would you ask a barber if you need a haircut? And, to make matters worse, some fiduciaries are also brokers, which leads us to ask which hat they're wearing when they're advising us on fund options?! Robbins stresses that finding an advisor who is a fiduciary and only a fiduciary is akin to finding a needle in a haystack (thanks in part to the lure of highly-lucrative brokerage commissions). That said, it's worth the effort to look because these fiduciaries are required to act in your best interest and are more likely to recommend funds that offer superior performance at a fraction of the cost of other investments (such as index funds). Second only to receiving sound advice on the types of funds to consider is asset allocation, which can help reduce the volatility and risk associated with our portfolio. Robbins suggests the best advice is to hold a portfolio of stocks, bonds, real estate and other exploratory investments, that is in line with your objectives and personal financial goals. His contributor and business partner, Peter Mallouk, stresses that a cookie cutter approach is almost never appropriate. Instead, the portfolio we choose needs to match who we are and what we need, not one that is simply based on our age and risk tolerance. Finally, Robbins stresses there are four rules to follow when selecting investments:

Don't lose money: the more money we lose, the more difficult it is to make up the lost ground.
Look for what he calls "asymmetric rewards" (mitigate risk exposure and increase the potential payoff).
Ensure investments are tax efficient (hint: actively managed funds usually are not due to the frequent buying and selling activity).
Diversify (choose diverse, uncorrelated investments).

[T]he best investors are obsessed with avoiding losses. Why? Because they understand a simple but profound fact: the more money you lose, the harder it is to get back to where you started. (pg. 97)

#3. Protecting Ourselves...From Ourselves

We are our own worst enemy. We think we have nerves of steel...until we don't. Unfortunately for the average investor, fear is a powerful motivator. We need to establish a plan of action up front and agree on what action we will take and when. Better still, we need to select a co-pilot who we can check in with to help ensure we're not doing anything off plan and/or rash. In fact, Robbins stresses that the best of the best investors always have a wingman/woman for just this type of sanity check. This could be a fiduciary or a knowledgeable even-keeled friend who is consistently successful in his/her investment efforts. Then, and only then, can we feel secure in knowing that we've reduced our potential to behave irrationally with our hard-earned money.

The single biggest threat to your financial well-being is your own brain. (pg. 142)

Care for one last piece of advice when it comes to self-management and optimizing our investment returns? Robbins tells us that the less we feel we need, the more likely we will be satisfied and successful over both the near and the long-term.

Bottom Line

Tony Robbins packs a lot of wisdom from the legends of the investment community in a small package. The information is straightforward, sound and highly actionable. This book is a great investment reference to add to your library.

Where you can find the book: Amazon @ $15.56

Other suggested books of this type: "I Will Teach You To Be Rich" by Ramit Sethi and "The Little Book of Common Sense Investing" by John C. Bogle. Books on behavioral psychology: "Predictably Irrational" by Dan Ariely and "Thinking, Fast and Slow" by Daniel Kahneman. Cautionary books on the financial industry: "Pound Foolish" by Helaine Olen and "The Big Short" by Michael Lewis. ***** All book reviews include affiliate links to Amazon.com or other places they’re sold. Thank you to all those who support our site by going through these links!