Book Review: Money – Master the Game

I don’t usually review books, but when a book about money hits #1 on Amazon then it’s worth taking a look.  Money – Master the Game by Tony Robbins is a 600 page book about money that purports to provide the reader with the tools and understandings to become financially independent by following 7 simple steps.  This is a pretty bold topic for Robbins to cover considering that it’s not his area of expertise.  There’s a lot to like about the book, but I came away from the book feeling conflicted.

First, I am excited that someone of Tony’s stature and reach is taking this topic seriously because the general public is so badly misinformed about the topic of money that any little bit of added education is a positive.   The more we can turn the spotlight on this topic the more informed we’ll all get.  So, before I point out some criticisms of the book I should note that the mere fact that Robbins is writing this book is a good thing.  He’s putting the spotlight on an extremely important topic.  At the same time, “money” really isn’t a “game” and people like myself who are professionals in this industry think that it’s pretty important to not only take this stuff seriously, but get the details right in a fully transparent manner.  So let’s explore the text a bit more:

• The first step in achieving financial success is getting in the game.  Robbins is making a hugely important point here.  Most Americans don’t even own stocks or bonds so the decision to invest in the first place is the most important one.  Robbins and his motivational style get the reader excited about getting involved in the markets and making smart decisions with your money.  So bravo for step 1.

 

• Robbins cites the importance of investing in yourself.  Regular readers know that I think this is the most important investment you’ll ever make.  So again, Robbins makes a crucially important point here that everyone should digest.

 

• Robbins stresses the importance of becoming an “insider” and steers the reader towards many of his own companies or companies he’s partnered with.  This left me conflicted and feeling as though I was reading a commercial for a few firms that Robbins may or may not have a financial relationship with.  I wish he’d spent less time promoting certain firms and more time providing unbiased and objective advice.

 

• He regularly demonizes high fees, but goes on to recommend working with firms like Lifetime Income and Stronghold Financial.  I called Lifetime Income to inquire about their products and they referred me to one of their California partners who informed me that their fee structure starts at 1.5% and is often higher depending on the product.  So, the book promotes a low fee approach, but specifically recommends working with companies who will then outsource you to high fee firms.  This is a contradiction that is difficult to reconcile and seriously undermines the credibility of the text.

 

• The book is filled with contradictory strategic investment commentary.  Robbins stresses the importance of using passive index funds, but also explains the importance of asymmetric returns and active strategies.  He interviews supposed “insiders” who have totally contradictory approaches (stock traders, activists and indexers) while putting many high fee hedge fund managers on a pedestal.  He even cites his own market timing calls over the years as if that adds any value to the text without mentioning that he has made some very publicly horrible stock market calls (see here for instance).  You come away thinking that these high fee active managers are geniuses, but then you’re told at points that high fee active managers are useless.  Again, the commentary seemed to contradict itself consistently.

 

• He does discuss one specific investment allocation approach in great detail.  He holds the Ray Dalio “All Weather” strategy up as if it’s some sort of genius asset allocation, but as I previously noted, the Tony Robbins “All Weather” is not really Dalio’s All Weather approach.  In fact, it is nothing more than a cookie cutter bond heavy asset allocation.  Robbins refers to it as a “never-before-revealed” strategy, but the All Weather strategy has been well documented and is even replicated by many fund companies.  But the Tony Robbins portfolio, which Dalio himself says is vastly oversimplified is just a bond heavy allocation that performed well over the 30 year period when bonds were in a huge bull market.  Granted, you could do worse than this approach, but the way Robbins presents the strategy makes you think that Dalio has offered up some holy grail for investing or a secret that he has never disclosed.  But that’s not really the case at all.

 

• Robbins promotes structured notes, annuities and market linked CD’s all through the book stressing all the “guarantees” in the products.  Well, you pay for those guarantees. There is no free lunch here.  So you get this endless back and forth about these high fee products combined with an endless message about how high fees are bad.  And as I mentioned before, when I called Lifetime Income to inquire about an indexed annuity I was promptly referred to a high fee advisor.

 

• At one point he goes on about the dangers of the national debt in the USA.  It’s not the first time he’s done this.  I wrote a post that was critical of this video he produced in 2012 talking about how the USA was on the verge of some fiscal crisis.  Unfortunately, this is the problem with someone who’s an expert in something else who suddenly tries to conquer a huge topic like money.  You have a tendency to oversimplify and misunderstand macroeconomic concepts.  People who say the US government is bankrupt or running out of money lack the very most basic understanding of macroeconomics.  I’ve been writing papers, books and posts about this topic for years trying to better educate people about the solvency risk of the US government.  But the message clearly isn’t getting out to “insiders” like Tony Robbins.

 

•  There are more minor issues with the text that only bother a nerd like me.  For instance, he doesn’t ever define money or talk about where it comes from.  I just find it odd to write a book about money without defining what money is or describing the system in which money exists.  He also stresses the idea of saving, but makes the classic macro fallacy of composition by misunderstanding that aggregate saving cannot lead to more saving.  Things like this make me seriously wonder if Robbins really has a good grasp on these topics.

I’m being hypercritical, but this is a very important topic and Robbins is influencing a lot of people.  And while he certainly moves the ball in the right direction I still think the book comes up a bit short.  I hate to sound negative because I am certain that Tony has good intentions, but in order to understand money we need to have a really honest discussion about it.  After all, that’s what money really is in a modern monetary system – credit, from the latin word credere meaning to “believe”.  Unfortunately, for me, the contradictions on fees, products, gurus, strategies and basic misunderstandings just don’t add up and reduce the credibility of many of the core concepts.