Entrepreneurs have a latent need to control everything. They personally speak with every client and are at every design meeting. They hit the gym and put down the cookie. They seemingly have it all under control.
Yet when it comes to their finances, so many entrepreneurs actually relinquish control to someone else.
Truth is, many of us do the same. We hand off our 401(k)s — the money we plan to live on in retirement — to someone we barely know and just trust that he or she will do right by us.
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But we are often hit with phantom fees and taxes, and we barely ask why. There are some new Department of Labor laws coming down the pike that should offer consumers more transparency — but it will never be enough.
And Tony Robbins agrees. The uber-passionate life and business strategist believes you should take more control of our financial life, so he’s updated his number-one New York Times bestselling book, Money: Master the Game and is giving it away for free — you just need to pay the $7.95 shipping and handling.
If happen to live under a rock and haven’t listened to Robbins speak, please do that first. Listen to his TED talk, which was one of the top-10 most popular of all time, or to his most recent podcast. You’ll instantly get a sense of his infectious energy and why he has dedicated his almost 40-year career to helping people achieve their goals and get out of their own way.
And for many years, he mainly focused on pushing people to achieve their ultimate relationships and aspirations. But recently, he has broadened his scope to tackle money issues.
“Your body, your emotions, your relationships and your finances are the few subjects that affect us the most,” says the entrepreneur who has worked with over 50 million people from 100 countries. “And if you’re finances are messed up, odds are good you are.”
Or your marriage is. Or your business is. Or your (fill in the blank) is.
“If you do what you’ve always done, you’ll get what you’ve always gotten.” — Tony Robbins
And yet so many of us have put that piece of our lives on auto-pilot. We have automatic withdrawals from our paychecks to our 401(k)s or IRAs. And while we have no idea what’s happening with the money, we still fully expect to end up with enough income to sail around the world at 65.
Well, good luck with that. Because the truth is, we’ll spend more time planning that trip then figuring out how to save for it.
But you can’t run a business or a household if you don’t understand its finances. And sure, many argue the market system is rigged. Maybe it is. But there are things you can control to better ensure you have money in your company’s coffers and your retirement plan.
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“If you want to be successful, find someone who has achieved the results you want and copy what they do and you’ll achieve the same results.” — Tony Robbins
One of the perks of being number 49 on the Worth Power 100 list of global finance people is that Robbins has access to some pretty accomplished folks. So he spent serious time, over the course of four years, with people like activist investor Carl Icahn, Vanguard founder Jack Bogle, Charles Schwab, T. Boone Pickens and Ray Dalio, the founder of Bridgewater Associates, a hedge fund with $150 billion under management, and compiled everything he learned in his book.
Now clearly no one is promising that you too will amass $150 billion, but there are overlapping strategies and philosophies that can help empower you and let you take control.
“Successful people ask better questions, and as a result, they get better answers.” — Tony Robbins
You don’t need to become a certified financial planner to ask the right questions. Robbins suggests you understand the 3F’s.
1. Fees and taxes
You have to control them both. You can be scrupulous about saving, but if you’re 401(k) is being hit with a 3-percent fee versus 1 percent, you could be shaving years off your nest egg.
“You can’t control the market but you can control fees. That’s half the battle,” he says.
Understand your mutual funds. Actively managed funds charge a fee and allow the managers to trade how they see fit. That could generate a tax bill. Index funds follow an index — like the S&P 500 — so both the fees and taxes are lower. Which do you have?
Do you have a fiduciary or a broker controlling your money?
In super simple terms, securities brokers are regulated by the Financial Industry Regulatory Authority under a "suitability" standard.
That means the investments they pick for you just have to be “suitable.” So that leaves a lot of gray room for some brokers out there to sell you a product just to get the commission. Fiduciaries, on the other hand, have a responsibility to work in your best interests.
Now that is a gross generalization. Because I know tons of brokers who care deeply about their clients and would lie on railroad tracks for them before they sold inappropriate products.
Still, there are bad apples are everywhere. The Department of Labor has new rules coming out that offer some consumer protection. Some, not enough.
So ask some questions. Or do some homework of your own. Robbins also has partnered with showmethefees.com. The site lets you drop in your 401(k) info, and it will tally the fees you’re paying — for free.
He is also on the board of directors and Chief of Investor Psychology at creativeplanning.net. Its portfolio checkup section also will help you see the real costs and risks in your investments.
“Only those who have learned the power of sincere and selfless contribution experience life’s deepest joy: true fulfillment.” — Tony Robbins
Having control over your life, your dreams, your goals — and your finances — will bring you closer to ultimate fulfillment, says Robbins. And part of feeling fulfilled is giving back.
All proceeds from his book are being donated to Feeding America. Robbins grew up in an abusive home and often didn’t know where his next meal was coming from. So his mission is to make sure no one feels that way again.
Last year, he provided 59 million meals to Americans in need and matched funds to feed over 100 million altogether. His goal is to feed 250 million by the end of this year and a billion in a decade.
And his message is simple: You need to take control of all aspects of your life to succeed in this world and be able reach that level of fulfillment where you are constantly growing and contributing back.
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Then the only question you will need to ask yourself is: What am I doing to leave this world a better place?
Because that is ultimately what we all should be worrying about.