Book Reviews

Unshakeable by Tony Robbins -Book Notes, Summary, and Review

Unshakeable - Tony Robbins

Get it on Amazon

Rating: 7/10

Date of reading: 2nd – 9th of March, 2017

Description: Stock investment is how rich stay rich. Stock investment is how the rich become poor. Stock investment is how the poor become rich. And stock investment is how the poor stay poor. Nuances matter and they are heavily talked about in this book.


My notes:




“HEDGE FUNDS VS. MUTUAL FUNDS VS. INDEX FUNDS For those unfamiliar, a hedge fund is a private fund available only to high-net-worth investors. The managers have complete flexibility to bet on both directions of the market (up or down). They charge hefty management fees (typically 2%) and share in the profits (typically 20% of profits go to the manager). A mutual fund is a public fund available to anyone. In most cases, they are actively managed by a team who assembles a portfolio of stocks, bonds, or other assets and continually trades their holdings in hopes to beat the “market.” An index fund is also a public fund but requires no “active” managers. The fund simply owns all the stocks in the index (for example, they would own all 500 stocks in the S&P 500 index).” ( :30)

“As the saying goes, “When a person with experience meets a person with money, the person with experience ends up with the money; and the person with money ends up with an experience.”” ( :30)

“The majority of investors fail to take full advantage of the incredible power of compounding—the multiplying power of growth times growth. —BURTON MALKIEL” ( :36)

“Let’s illustrate the tremendous impact of compounding with just one simple but mind-blowing example. Two friends, Joe and Bob, decide to invest $300 a month. Joe gets started at age 19, keeps going for eight years, and then stops adding to this pot at age 27. In all, he’s saved a total of $28,800. Joe’s money then compounds at a rate of 10% a year (which is roughly the historic return of the US stock market over the last century). By the time he retires at 65, how much does he have? The answer: $1,863,287. In other words, that modest investment of $28,800 has grown to nearly two million bucks! Pretty stunning, huh?” ( :37)

“His friend Bob gets off to a slower start. He begins investing exactly the same amount—$300 a month—but doesn’t get started until age 27. Still, he’s a disciplined guy, and he keeps investing $300 every month until he’s 65—a period of 39 years. His money also compounds at 10% a year. The result? When he retires at 65, he’s sitting on a nest egg of $1,589,733. Let’s think about this for a moment. Bob invested a total of $140,000, almost five times more than the $28,800 that Joe invested. Yet Joe has ended up with an extra $273,554. That’s right: Joe ends up richer than Bob, despite the fact that he never invested a dime after the age of 27! What explains Joe’s incredible success? Simple. By starting earlier, the compound interest he earns on his investment adds more value to his account than he could ever add on his own.” ( :37)

“And let me tell you, the ability to invest without fear is critically important. Why? Because so many people are so paralyzed by fear that they can barely bring themselves to dip their toes in the water. They’re terrified that the stock market will crash and wash away all of their hard-earned savings. They’re terrified that stocks will nosedive right after they invest. They’re terrified that they’ll get hurt because they don’t know what they’re doing. But as you’ll soon discover, all those fears will quickly fall away once you understand the pattern of facts that we’re going to reveal over the next few pages.” ( :43)

“If you’re not convinced, here’s what two of the wisest masters of the financial world think of market timing and the challenge of predicting market movements. Jack Bogle, the founder of Vanguard, which has more than $3 trillion in assets under management, has said, “Sure, it would be great to get out of the stock market at the high and back in at the low, but in 65 years in the business, I not only have never met anybody that knew how to do it, I’ve never met anybody who had met anybody that knew how to do it.” And Warren Buffett has said, “The only value of stock forecasters is to make fortune-tellers look good.”” ( :45)

“Freedom Fact 4: The Stock Market Rises over Time Despite Many Short-Term Setbacks” ( :48)

“The S&P 500 index experienced an average intra-year decline of 14.2% from 1980 through the end of 2015. In other words, these market drops were remarkably regular occurrences over 36 years. Once again, nothing to be scared of—just a matter of winter putting in its usual seasonal appearance. But you know what really blows my mind? As you can see in the chart below, the market ended up achieving a positive return in 27 of those 36 years. That’s 75% of the time!” ( :48)

“The great thing is that you benefit from these upgrades in the quality of the companies in the index. How? Well, as a shareholder of an index fund, you own part of the future cash flows of the companies in that index. This means that the American economy is making you money even while you sleep!” ( :49)

“The first fact you need to know is that there were 34 bear markets in the 115 years between 1900 and 2015. In other words, on average, they happened nearly once every three years.” ( :50)

“The most successful investors take advantage of all that fear and gloom, using these tumultuous periods to invest more money at bargain prices. Sir John Templeton, one of the greatest investors of the last century, talked to me at length about this in several interviews I did with him before he passed away in 2008. Templeton, who made a fortune buying cheap stocks in the midst of World War II, explained: “The best opportunities come in times of maximum pessimism.”” ( :51)

“As you can see from the chart on the next page, the market finally hit rock bottom on March 9, 2009. And do you know what happened next? The S&P 500 index surged by 69.5% over the next 12 months. That’s a spectacular return!” ( :51)

“The S&P 500 index surged by 69.5% over the next 12 months. That’s a spectacular return! One moment, the market was reeling. The next moment, we began one of the greatest bull markets in history! As I write this in late 2016, the S&P 500 has risen by an astonishing 266% since its low point in March 2009.” ( :51)

“Now can you see why Warren Buffett says he likes to be greedy when others are fearful? He knows how quickly the mood can switch from fear and despondency to exuberant optimism. In fact, when the mood in the market is overwhelmingly bleak, superinvestors such as Buffett tend to view it as a positive sign that better times lie ahead.” ( :52)

“The stock market is a device for transferring money from the impatient to the patient. —WARREN BUFFETT” ( :53)

“In fact, the US market hits an all-time high on approximately 5% of all trading days. On average, that’s once a month. II” ( :53)

“Meanwhile, a study by JPMorgan found that 6 of the 10 best days in the market over the last 20 years occurred within two weeks of the 10 worst days.” ( :54)

“Don’t just take my word for it. The nonprofit organization AARP published a report in which it found that 71% of Americans believe that they pay no fees at all to have a 401(k) plan. That’s right: 7 out of 10 people are entirely unaware that they’re even being charged a fee! This is the equivalent of believing that fast food contains no calories. Meanwhile, 92% admit that they have no idea how much they’re actually paying.” ( :58)

“”Let’s assume the stock market gives a 7% return over 50 years,” he began. At that rate, because of the power of compounding, “each dollar goes up to 30 dollars.” But the average fund charges you about 2% per year in costs, which drops your average annual return to 5%. At that rate, “you get 10 dollars. So 10 dollars versus 30 dollars. You put up 100% of the capital, you took 100% of the risk, and you got 33% of the return!”” ( :58)

“As he put it: “Overwhelmingly, mutual funds extract enormous sums from investors in exchange for providing a shocking disservice.”” ( :59)

“Index funds take a “passive” approach that eliminates almost all trading activity. Instead of trading in and out of the market, they simply buy and hold every stock in an index such as the S&P 500. This includes companies like Apple, Alphabet, Microsoft, ExxonMobil, and Johnson & Johnson— currently the five biggest stocks in the S&P 500. Index funds are almost entirely on autopilot: they make very few trades, so their transaction costs and tax bills are incredibly low. They also save a fortune on other expenses. For one thing, they don’t have to pay enormous salaries to all those active fund managers and their teams of analysts with Ivy League degrees!” ( :61)

“In another landmark study, researchers Richard Bauer and Julie Dahlquist examined more than a million markettiming sequences from 1926 to 1999. Their conclusion: just holding the market (via an index fund) outperformed more than 80% of market-timing strategies.” ( :62)

“Here’s another way to put this in perspective: an actively managed fund that charges you 3% a year is 60 times more expensive than an index fund that charges you 0.05%! Imagine going to Starbucks with a friend. She orders a venti caffé latte and pays $4.15. But you decide that you’re happy to pay 60 times more. Your price: $249! I’m guessing you’d think twice before doing that.” ( :63)

“Only 8 of these 203 funds actually beat the S&P 500 index. That’s less than 4%! To put it another way, 96% of these actively managed funds failed to add any value at all over 15 years!” ( :64)

“One reason why they win is that they base every investment decision on a deep understanding of probabilities, not on emotion or desire or luck. But most of these unicorns run enormous hedge funds that” ( :65)

“Warren Buffett, who has outpaced the market by a huge margin, also advises regular people to invest in index funds, so they can avoid the drain of excessive fees. To prove his point that almost all active managers underperform index funds over the long run, he made a $1 million bet in 2008 with a New York-based firm called Protégé Partners. He challenged Protégé to select five top hedge fund managers who could collectively beat the S&P 500 over a 10-year period. So what happened? After 8 years, Fortune reported that these hedge funds were up only 21.87%, versus 65.67% for the S&P 500! The race isn’t over yet. But as it stands, these active managers look like contestants in a three-legged race trying to catch Usain Bolt, the world’s fastest man.” ( :66)

“You might not believe this, but for almost three decades, the companies providing 401(k) plans were not even required by law to disclose how much they were charging their customers!” ( :69)

“So why not just pick low-cost index funds when you’re investing in your 401(k) plan? Great question! The trouble is, most providers make index funds available only if the plan has a high level of assets. Why? Because index funds aren’t sufficiently lucrative for the provider. So they prefer to exclude them from the menu, if they can get away with it. If you work for a smaller company, chances are that you’ll be forced to invest in funds with higher fees.” ( :71)

“One major insurance company is offering an S&P 500 index fund for 1.68% annually, when the actual cost is just 0.05%. That’s a 3,260% markup! Think of it this way: your friend buys a Honda Accord for the regular retail price of $22,000. But you’re forced to pay a 3,260% markup. Your cost for the exact same car: $717,200! Welcome to the world of high finance.” ( :72)

“Instead of accepting kickbacks from mutual fund companies that want him to sell their overpriced funds, he offers only inexpensive index funds from firms such as Vanguard and Dimensional Fund Advisors. Tom’s company charges one fee—with no markups or hidden costs. It’s a fully bundled solution that eliminates brokers, commissions, and high-paid middlemen.” ( :73)

“Does this mean they’re dishonest? Not at all. But it does mean they’re working for the house. And remember: the house always wins. There’s a good chance your broker is a sincere person with high integrity, but he’s selling what he’s been trained to sell—and you should always assume that whatever he’s selling will benefit the house first.” ( :80)

“But these penalties are paltry for such colossal businesses. Bank of America had to shell out $415 million in fines for misusing its customers’ assets. Big deal! In one three-month period in 2015, the bank earned a profit of $5.3 billion. That’s in just 12 weeks! For companies this rich, those pesky fines are just a routine cost of doing business—the equivalent of you or me getting a parking ticket.” ( :81)

“• a broker, • an independent advisor, or • a dually registered advisor.” ( :82)

“fiduciary. I thought of fiduciaries as the gold standard. But then I discovered that this subject is murkier than I’d realized! Here’s the problem: the vast majority of independent advisors are registered as both fiduciaries and brokers. WTF?! In fact, as many as 26,000 out of 31,000 RIAs operate in this grey area where they have one foot in both camps. That’s right: only 5,000 of the nation’s 310,000 financial advisors are pure fiduciaries. That’s a measly 1.6%. Now you know why it’s so hard to get unconflicted and transparent advice. When I wrote Money: Master the Game, I became a champion of fiduciaries, only to discover this inconvenient truth about dual registration, first brought to me by Peter Mallouk.” ( :85)

“The poor client (we might as well call him the mark) pays the advisor twice: for “independent” advice on which investments to own and for the parent company’s own mediocre funds. Most clients aren’t even aware that they’re buying funds owned by the same firm. That’s because the fund arm and the advisory arm typically operate under different brand names. It’s like watching a master pickpocket at work. The trickery is so sly and cynical that you almost have to admire it.” ( :86)




“That, my friend, is an insight that you and I should never forget: we have to design an asset allocation that ensures we’ll “still be okay,” even when we’re wrong. Asset allocation is simply a matter of establishing the right mix of different types of investments, diversifying among them in such a way that you reduce your risks and maximize your rewards.” ( :97)

“Instead, they hunt for investment opportunities that offer what they call asymmetric risk/reward: a fancy way of saying that the rewards should vastly outweigh the risks. In other words, these winning investors always seek to risk as little as possible to make as much as possible. That’s the investor’s equivalent of nirvana.” ( :98)

“How is that possible? If Paul makes five investments, each for $1 million, and four in a row go to zero, then he’s lost a total of $4 million. But if the fifth investment is a home run and makes $5 million, he’s earned back his entire $5 million investment. In reality, Paul’s hit rate is a whole lot better than that! Imagine that only two of his five investments pan out as expected and go up fivefold. That means his original $5 million has just grown to $10 million. In other words, he’s doubled his money despite, in this case, being wrong 60% of the time!” ( :99)

“For example, Citigroup sank to a low of 97 cents a share, down from a peak of $57! You could literally own a piece of the company for less than it cost you to take money out of an ATM. But here’s the kicker: winter is always followed by springtime, and sometimes the seasons turn much quicker than you’d ever guess. This 97-cent stock shot to $5 within five months, giving investors a 500% return.” ( :100)

“Buffett did just that in late 2008, investing in fallen giants such as Goldman Sachs and General Electric, which were selling at once-in-a-lifetime valuations. Better still, he structured these” ( :100)

“investments in ways that reduced his risk even further. For example, he invested $5 billion in a special class of “preferred” shares of Goldman Sachs, which guaranteed him a dividend of 10% a year while he waited for the stock price to recover! Most people get so scared during crashes that they see only the downside. But Buffett made sure that it was almost impossible for him to lose. In other words, it’s all about asymmetric risk/reward!” ( :101)

“I have enough money to retire and live comfortably for the rest of my life. The problem is, I have to die next week. —ANONYMOUS” ( :102)

“David told me how individual investors can diversify by owning low-cost index funds that invest in six “really important” asset classes: US stocks, international stocks, emerging-market stocks, real estate investment trusts (REITs), long-term US Treasuries, and Treasury inflation-protected securities (TIPS). He even shared the precise percentages that he would recommend allocating to each.” ( :107)

“I learned that courage was not the absence of fear, but the triumph over it. The brave man is not he who does not feel afraid, but he who conquers that fear. —NELSON MANDELA” ( :110)

“But it was there that I started freaking out. I felt like a different human being, getting angry and frustrated at little things. What was wrong with me? Growing up, I’d lived in a world with no certainty. When my mom was on drugs and angry, she’d sometimes lose control over little things.” ( :110)

“no certainty. When my mom was on drugs and angry, she’d sometimes lose control over little things. If she thought I was lying about something she might pour soap in my mouth until I threw up—or smash my head against a wall. Since then, I’d spent a lifetime training and conditioning myself to find certainty in an uncertain world.” ( :110)

“”Am I going to live or die?”” ( :110)

“In the end, I decided to do nothing more than get myself tested every few years to see if my condition had worsened. I didn’t realize it then, but I’d just dodged a lethal bullet: the US Food and Drug Administration later outlawed that drug, based on studies showing that it caused cancer. Despite his best intentions, my big-hearted endocrinologist’s flawed advice could have ruined my life. And you know what? Twenty-five years later, I still have that tumor. In the meantime, I’ve had an amazing life, and I’ve been blessed with the opportunity to help millions of people along the way. This was possible only because I made myself unshakeable in the face of uncertainty.” ( :112)

“A simple rule dictates my buying: be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread. —WARREN BUFFETT IN OCTOBER 2008, explaining why he was buying stocks as the market crashed” ( :114)

“As I see it, 90% of surviving a bear market comes down to preparation. What’s the other 10%? That’s all about how you react emotionally in the midst of” ( :115)

“”The four most expensive words in investing are ‘This time it’s different.'” ( :115)

“The best investors know that the gloom never lasts. For example, Templeton made his first fortune by investing in dirt-cheap US stocks during the dark days of World War II. He later explained that he liked to invest at “the point of maximum pessimism,” when bargains were everywhere. Likewise, Warren Buffett invested aggressively in 1974 when markets were slammed by the Arab oil embargo and Watergate. While others were filled with despair, he was exuberantly bullish, telling Forbes: “Now is the time to invest and get rich.”” ( :116)

“The S&P 500 hit rock bottom in October 1974 and then jumped 38% in the next 12 months. In August 1982, with inflation out of control and interest rates at almost 20%, the S&P 500 bottomed out again—and then soared 59% in 12 months.” ( :116)

“How did this work out? Well, after bottoming out in March 2009, the S&P 500 shot up by 69.5% in just 12 months. Over 5 years, the index rose 178%, vindicating our belief that bear markets are the ultimate gift for opportunistic investors with a long-term perspective. As I write this, the market has risen 266% since the 2009 low.” ( :117)

“Let’s start with a simple thought experiment. Imagine that I have a bunch of guests in my house. I offer them $1 each to walk across the street. As it happens, I live on a quiet suburban road with little traffic. So my offer feels like free money. But let’s say I repeat the offer, and this time I give them two choices: either they can cross my street for $1, or they can cross a four-lane highway for $1. Nobody will take me up on this offer to cross the highway. But what if I offer $1,000 or $10,000? At some point, I’ll arrive at a figure that entices someone to cross that highway! What I’ve just illustrated is the relationship between risk and reward. There’s a risk of injury in both scenarios—and, as that risk increases, the reward must rise in order for this to be perceived as a fair deal.” ( :118)

“On average, the market is down about one in every four years. You need to recognize this reality so you won’t be shocked when stocks tumble—and so you’ll avoid excessive risks. At the same time, it’s useful to recognize that the market has made money three out of every four years. In the short term, the stock market is entirely unpredictable, despite the claims of” ( :118)

“complex, but it’s pretty simple. Bonds are loans. When you lend money to the federal government, it’s called a Treasury bond. When you lend money to a city, state, or county, it’s a municipal bond. When you lend money to a company such as Microsoft, it’s a corporate bond. And when you lend money to a less dependable company, it’s called a high-yield bond or a junk bond. Voilà! You’ve now completed Bonds 101.” ( :119)

“The other critical factor is the duration of the loan. The US government will currently pay you about 1.8% a year for a 10-year loan. If you lend the government that money for 30 years, you’ll earn about 2.4% a year. There’s a simple reason why you receive a higher rate for lending the money over a longer period: it’s riskier. Why do people want to own bonds? For a start, they’re much safer than stocks. That’s because the borrower is legally required to repay you. If you hold a bond to maturity, you’ll receive all of your original loan back, plus the interest payments—unless the bond issuer goes bankrupt. As an asset class, bonds deliver positive calendar-year returns approximately 85% of the time.” ( :120)

“So how should you approach the challenge of asset allocation? As I see it, the real question that you and your financial advisor have to answer is this: What asset classes will give you the highest probability of getting from where you are today to where you need to be? In other words, the design of your portfolio must be based on your specific needs.” ( :122)

“Whatever mix you choose, make sure you diversify globally across multiple asset classes. Imagine being a Japanese investor with all your money in domestic stocks: Japan’s market is still down from the insane heights it” ( :123)

“wonderful story of Theodore Johnson, a UPS worker who never earned more than $14,000 a year. He saved 20% of every paycheck, plus every bonus, and invested in his company’s stock. By age 90, he’d accumulated $70 million! The lesson: never underestimate the awesome power of disciplined saving combined with long-term compounding.” ( :124)

“As Princeton professor Burton Malkiel told Tony, unsuccessful investors tend to “buy the thing that’s gone up and sell the thing that’s gone down.” One benefit of rebalancing, says Malkiel, is that it “makes you do the opposite,” forcing you to buy assets when they’re out of favor and undervalued. You’ll profit richly when they recover.” ( :124)




“But I have to ask . . . What could mess this up? I’ll give you a clue: it’s nothing external. It’s you! That’s right. The single biggest threat to your financial well-being is your own brain.” ( :128)

“Paul Tudor Jones, a key focus has been to constantly update and improve the systems he uses to evaluate and make investment decisions. In fact, when I first met Paul, he had just made one of the greatest investment trades in history, taking full advantage of the market on Black Monday in 1987—an infamous occasion when the market fell 22% in a single day. Paul produced an almost unimaginable return of 200% that year for his investors.” ( :130)

“In order to correct this bias, I set out to discover how his behavior as an investor had changed. I met with Paul’s peers (including some of the greatest investors in history, such as Stanley Druckenmiller), interviewed his coworkers, and watched videos of him trading during his most successful times. Based on this in-depth understanding, I worked with Paul to create a checklist: a simple set of criteria that he could use as his checks and balances before making any trade.” ( :130)

“And what I’ve found again and again is that 80% of success is psychology and 20% is mechanics. Investor psychology is an incredibly rich and complex subject. In fact, there’s” ( :131)

“Investor psychology is an incredibly rich and complex subject. In fact, there’s an entire academic field called “behavioral finance,” which explores the cognitive biases and emotions that cause investors to act irrationally. These biases often lead people to make some of the costliest investing mistakes, such as trying to time the market, investing without knowledge of the real impact of fees, and failing to diversify.” ( :131)

“planet. Mistake 1: Seeking Confirmation of Your Beliefs Why the Best Investors Welcome Opinions That Contradict Their Own” ( :131)

“Peter and his team at Creative Planning set up an efficient plan for the client to diversify, dramatically reducing her exposure to this stock. The client agreed initially but then changed her mind, claiming she “knew” her beloved stock and understood why it would continue to soar. She told Peter, “I don’t care what you’re saying. This stock is what got me here!” Over the next four months, Peter’s team kept trying to convince her to begin the diversification process. But the client wouldn’t listen. During that time, the stock dropped by half, costing her $5 million. She was so upset that she dug in her heels even more and insisted on waiting for the stock to recover. It never did. If she had listened to this well-considered advice that contradicted her own beliefs, she would now likely be on track toward a life of total financial freedom.” ( :132)

“The key is to actively seek out qualified opinions that differ from your own. Of course, you don’t want just anyone with a different opinion, but rather someone who has the skill, track record, and intelligence to give another educated perspective. All opinions are not created equal.” ( :132)

“Peter Guber. I explain what I believe, and then I ask: “Where could I be wrong? What am I not seeing? What’s the downside? What am I failing to anticipate? And who else should I speak with to deepen my knowledge?” Questions like these help to protect me from the danger of confirmation bias.” ( :133)

“Ironically, the next day, the market snapped back in the opposite direction, with the Dow jumping 316 points as investors began to adjust to their new version of reality.” ( :133)

“There’s actually a technical term for this psychological habit. It’s called “recency bias.”” ( :133)

“I recently interviewed Harry Markowitz, a famous economist who won the Nobel Prize for developing “modern portfolio theory”: the basis for much of what we know today about how to use asset allocation to reduce risk. Harry is a financial genius, and, at the age of 89, he’s seen everything under the sun, so I was eager to speak with him about the most common investing mistakes we need to avoid.” ( :134)

“Countless studies have described some of the wonderfully absurd effects of overconfidence. For example, one study found that 93% of student drivers believe they are above average. In another study, 94% of college professors considered themselves above average in the classroom. There was even a finding that 79% of students believed their character was better than most, despite the fact that 60% admitted they had cheated on an exam in the previous year. We each envision ourselves as a member of the “I’d never do that” moral minority.” ( :135)

“invest in a portfolio of low-cost index funds, and then hold them through thick and thin.” ( :136)

“was in penny stocks and had done really well. “I can see that,” I said. “Do you have any tips?” She replied, “Actually, right now, there’s an extraordinary one.” She gave me the name of a hot stock—and let me tell you, it felt like a gift from on high! A sure thing, right from the horse’s mouth! So I took $3,000, which was the equivalent of $3 million for me back then, and I bet it all on that one stock. And guess what happened? It went to zero! Boy, did I feel like an idiot.” ( :137)

“In fact, it’s not just American investors who view the rest of the world with suspicion! Richard Thaler and Cass Sunstein, who are leading experts on behavioral finance, have written that Swedish investors have an average of 48% of their money in Swedish stocks—despite the fact that Sweden accounts for around 1% of the global economy: “A rational investor in the United States or Japan would invest about 1% of his assets in Swedish stocks. Can it make sense for Swedish investors to invest 48 times more? No.”” ( :139)

“By diversifying internationally, you’re not only reducing your overall risk but also increasing your returns. Remember when we talked about the “lost decade” of 2000 through 2009, when the S&P 500 produced an annualized return of only 1.4% a year, including dividends? During that time, international stocks averaged 3.9% a year, while emerging-market stocks returned 16.2% a year. So, for investors who diversified globally, those lost years were just a minor bump in the road.” ( :139)

“To make matters worse, the psychologists Daniel Kahneman and Amos Tversky also demonstrated that financial losses cause people twice as much pain as the pleasure they receive from financial gains. The term used to describe this mental phenomenon is “loss aversion.”” ( :140)

“One reason why the best investors are so successful is that they override this natural tendency to be fearful during periods of market turmoil. Take Howard Marks. In the last 15 weeks of 2008, when financial markets were imploding, he told me that his team at Oaktree Capital Management invested about $500 million a week in distressed debt. That’s right! They invested half a billion dollars a week for 15 straight weeks during a time when many thought the end times had arrived! “It was obvious that everybody was suicidal,” Howard told me. “In general, that’s a good time to buy.”” ( :140)

“When people dream of becoming rich, they’re not fantasizing about owning millions of pieces of paper with pictures of dead people on them! What we really want are the emotions we associate with money: for example, the sense of freedom, security, or comfort we believe money will give us, or the joy that comes from sharing our wealth. In other words, it’s the feelings we’re after, not the money itself.” ( :144)

“Real wealth is emotional, psychological, and spiritual. If you’re financially free, but you’re still suffering emotionally, then what kind of victory is that?” ( :144)

“Every culture has different beliefs and values, yet there are fundamental needs and desires that all human beings share. What I’ve found wherever I go is that we all crave an extraordinary quality of life.” ( :145)

“The first is what I call the “science of achievement.” In every field, there are rules of success that you can either break (in which case, you’ll be punished) or follow (in which case, you’ll be rewarded). For example, there’s a science to health and fitness. Biochemically, we’re all different. But there are fundamental rules you can follow if you want to thrive and have high energy. If you violate those rules, you’ll pay the consequences.” ( :145)

“focus unleashes a burning desire that can help you obtain what might otherwise be out of reach. Here’s what’s going on beneath the surface: a part of your brain called the reticular activating system is activated by your desire, and this mechanism draws your attention to whatever can help you achieve your goal.” ( :145)

“A lot of people dream big but never get started! To succeed, you need to take massive action. But you also need to find the most effective execution strategy, which means changing your approach until you find what works best. You can speed up this process exponentially by modeling people who’ve already been successful, which is why we’ve focused so intently on money masters such as Warren Buffett, Ray Dalio, Jack Bogle, and David Swensen. By studying the right role models, you could learn in a week what might otherwise take you a decade.” ( :146)

“my heart and soul that the art of fulfillment is an even more important skill to master. Why? Because if you master the external world without mastering the internal world, how can you be truly and sustainably happy? That’s why my greatest obsession today is the art of fulfillment.” ( :146)

“some sort of Renaissance masterpiece that you might see in a museum in Paris or London. But when I got to Steve’s house, you know what I found? A painting of a big orange square! I couldn’t believe it. I took one look at it and jokingly said, “Give me a hundred bucks’ worth of paint, and I can duplicate this in an hour!” He wasn’t overly amused. Apparently, this was one of the greatest paintings by the abstract artist Mark Rothko. So why am I telling you this story? Because it perfectly illustrates the fact that we’re all fulfilled by different things. Steve is more sophisticated than I am when it comes to art, so he could detect a depth of beauty, emotion, and meaning in those brush strokes that I couldn’t see. To put it another way, one man’s orange splotch is another man’s $86.9 million fantasy!” ( :147)

“In fact, I can tell you the secret to happiness in one word: progress.” ( :147)

“Remember: money doesn’t change people. It just magnifies who they already are: if you have a lot of money and you’re mean, then you have more to be mean with; if you have a lot of money and you’re generous, you’ll naturally give more.” ( :147)

“Was Robin Williams a master achiever? Absolutely. He started out with nothing. But then he decides that he wants to star in his own TV show, and he does it. Then he decides that he wants a beautiful family, and he creates it. Then he decides that he wants more money than he can spend in a lifetime, and he makes it happen. Then he decides to become a movie star, and he does it. Then he decides that he wants to win an Oscar—but not for being funny—and he does that, too! Here was a man who had it all, who achieved everything he’d ever dreamed of achieving.” ( :148)

“When I think about this terrible tragedy, I’m struck by one simple lesson: if you’re not fulfilled, you have nothing.” ( :148)

“My friend then echoed what I and so many others have taught for years: We can’t control all the events in our lives, but we can control what those events mean to us—and thus what we feel and experience every day of our lives!” ( :149)

“The trouble is, the human brain isn’t designed to make us happy and fulfilled. It’s designed to make us survive. This two-million-year-old organ is always looking for what’s wrong, for whatever can hurt us, so that we can either fight it or take flight from it. If you and I leave this ancient survival software to run the show, what chance do we have of enjoying life?” ( :149)

“But in reality, the mental and emotional state in which you live is ultimately the result of where you choose to focus your thoughts.” ( :150)

“proudly announced that the plane had international Internet access. All around me, people started cheering, clapping, and high-fiving one another! It was as if God had descended from on high and entered the plane! I didn’t stand up and do a jig, but I have to confess: in my mind, I was clapping, too. And then, after 15 minutes of giddy delight, do you know what happened? We lost Internet access. It didn’t work for the rest of the flight, and it’s probably still not working after all these years. So how do you think the passengers reacted? We were crushed! One minute, we’re euphoric. The next minute, we’re cursing our terrible misfortune. What’s amazing is how quickly our” ( :150)

“perspective changed: moments earlier, Internet access had been a miracle; now it was an expectation! All we could think about was that the airline had violated our inalienable right to Internet access—a right that hadn’t existed until that very day.” ( :151)

“Either you master your mind or it masters you. The secret of living an extraordinary life is to take control of the mind, since this alone will determine whether you live in a suffering state or a beautiful state.” ( :152)

“Our lives are shaped not by our conditions, but by our decisions.” ( :152)

“To put this another way, will you commit to enjoying life not only when everything goes your way but also when everything goes against you, when injustice happens, when someone screws you over, when you lose something or someone you love, or when nobody seems to understand or appreciate you? Unless we make this definitive decision to stop suffering and live in a beautiful state, our survival minds will create suffering whenever our desires, expectations, or preferences are not met. What a waste of so much of our lives!” ( :152)

“But here’s what I do now. As soon as I feel the tension rising in my body, I catch myself. And the way that I catch myself is really simple: I gently breathe and slow things down. I step out of the situation and start to distance myself from all those stressful thoughts that my brain is generating. It’s natural for these thoughts to arise, but they’re just thoughts. When you slow down, you realize that you don’t have to believe these thoughts or identify with them. You can step back and say to yourself, “Wow, look at that crazy thought go by! There goes that crazy mind again!”” ( :153)

“What’s miraculous is that the jagged lines on the EEG and the EKG tend to become rounded after this meditation. What’s more, the lines from the heart and the brain become almost identical. Why? Because the mind and the heart are now operating as one. This is what happens naturally when you’re in a state of flow.” ( :156)

“The simple goal of this meditation is to change your emotional state by filling you with a sense of gratitude, and to use that emotion to solve whatever challenge has been causing you to suffer. Why gratitude? Because you can’t be grateful and angry at the same time. You can’t be grateful and fearful at the same time. If you want a miserable life, there’s no better way to achieve it than to focus your mind on anger and fear! But if you want a happy life, if you want to live in a beautiful state, nothing works better than to focus on gratitude!” ( :156)

“Fill yourself up with gratitude because when you’re grateful, there is no sadness, there is no hurt, there is no anger. You can’t be grateful and angry simultaneously. You can’t be grateful and worried simultaneously. If we cultivate gratitude, we have a different life.” ( :157)

“A few years ago, I met an incredible woman named Alice Herz-Sommer, a brilliant pianist born in Czechoslovakia in 1903. During World War II, Alice and her son were deported and sent to a concentration camp. She was forced to give piano recitals in the camp—and somehow pretend that she was gladly performing for her Nazi captors. Otherwise they would have killed her child. The extraordinary story of how Alice survived these experiences with her spirit intact is recounted in a biography entitled A Garden of Eden in Hell.” ( :159)

Check out more book notes at How I Read 90 Books In The Past 2 Years By Reading 20 Pages A Day

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