The Tim Ferriss ShowEp 38: Tony Robbins on Morning Routines, Peak Performance,and Mastering Money - Part 2Tim @ 0:24:Why hello there, my dear little munchkins! This is Tim Ferriss. I’ve had some caffeine since you lastheard from me. What you’re about to hear is part 2 of a multi-part conversation with Tony Robbins. Toput it briefly, Tony Robbins is a performance strategist with clients including presidents like Bill Clinton,Mother Theresa - not making this up - Andre Agassi, Leonardo DiCaprio, and Oprah Winfrey, whocalls him “superhuman.” This guy is a force of nature. If you didn’t catch the first part, you might wantto do that before venturing in; but, really, we jump around a lot, cover a lot of different topics. If youdon’t mind your stories more of a jigsaw puzzle, then by all means keep on listening from this pointon.

This episode is bought to you by 99designs.com, the largest marketplace of graphic designers in theworld. Here’s how it works: you go to 99designs.com - I suggest 99designs.com/tim for reasons I’llexplain - and whether you need to create a logo, a website, a car wrap, a bumper sticker, a t-shirt,whatever it might be: you can put up what you need, a description, then designers around the worldcompete for your business by submitting ideas and designs and so on and in less than a week, youhave an original design that you love, or you get all your money back. I’ve used 99designs for years,including for some very big projects like the book cover - or at least brainstorming book cover ideasfor the four hour body, which went on to become a #1 new york times bestseller; it’s in a dozen pluslanguages and has sold a gajillion copies. I have used it when time and money has been of theessence; it is a fantastic tool and if you go to 99designs.com/tim, you can actually see some of thecampaigns, some of the competitions that I’ve run: actual submissions for the book covers and thingslike that. You can also get a 99-dollar upgrade for free, which gets you more submissions. So check itout, 99designs.com/tim.

And now without further ado, please enjoy part 2 - the final part - of the tim ferriss show with TonyRobbins.

Tim @ 2:47:And to touch on a few things that you mentioned - for those people asking themselves, as I’m sure alot of people would: “How can I apply what these guys do to what I do?” I think that you present anumber of observations articulated very, very well that most people will never be exposed to. 

For instance: #1 - asset allocation does not mean choosing if you are going to be a stockpicker orinvest in an index fund for the S&P 500, because you’re in one bucket, right?

Tony @ 3:17:That’s right!

Tim @ 3:19:You’re in a correlated class.

Tony @ 3:20:There’s no diversification in that.

Tim @ 3:21:Right. There’s more to it..

Tony @ 3:22:Well, there’s some, maybe in more companies, but it’s all within the same asset class.

Tim @ 3:26:Yeah. And the other thing is that: there are ways to look at the problem, uh, that are not obvious rightoff the bat. For instance, you mentioned something that’s so simple, but a lot of people miss: If youinvest and you lose 50%, you have to now have a 100% gain to get back to break-even. Put anotherway - this is also straight from the book - let’s just say, I think it was investing over either five or tenyears, the exact number is in the book - you’d invested in the stock market through a - let’s just call itan off-the-shelf mutual fund that charges typical fees.

Tony @ 4:07:Yeah.

Tim @ 4:07:And the market moves up and down, up and down, up and down. At the end of the period of time,you’re back at the same market levels…

Tony @ 4:13:Yes.

Tim @ 4:14:You would think if you put in $100 grand, you’d have $100 grand at that period of time. And it ends up,you’re 47% down.

Tony @ 4:22:It’s the idea of average rates of return. If a lot of people look at what they’ve invested, their broker orwhoever represents them will show them the portfolio and go: “Look, you started here, you went up50%, you went down 50%, but you went 50%, you went down 50%” Your average rate of return iszero. But when you put real dollars in there, $100 thousand and you go up 50 - it’s 150. You go down50 - it’s 75. You go up 50, oops! Then you go down and you end up at $37 thousand instead of $100thousand! Your principal’s moving up and down. The biggest lie - in the book, I walk you throughthese seven steps. One of those steps is, frankly, you’ve got to do what most of us, probably thepeople listening on your team already do: You gotta become investor: you gotta become an owner,not a consumer. The way to do that - frankly, we all know, but very few people do - you take apercentage, you lock it down. You never see it, it’s automated. You put it aside for investment and thatjust occurs.

I’ve showed people some of the tools that Nobel prize winners have come up with so if you say: “Ihave no money.” You can invest more for tomorrow by committing when you get a raise or yourcompany gets to the next level, you automatically have that percentage go there. It’s money you’venever seen, it’s not taking money away from you, so you’re willing to commit to it, right?

Tim @ 5:35:And there are ways to automate that.

Tony @ 5:36:Yeah, totally automate it. It’s just fantastic. They took a group of blue collar workers who couldn’t savemore than 3% and they showed in twelve years, they had them up to 16% with absolutely no sense ofloss. They show this with an example: If you give a monkey an apple, they go crazy. If you give them

two apples, they go crazy. If you take one of the two apples back, they’re angry as hell. They still havethe same first apple; what happens is if you don’t give them that second apple, but it gets invested forthem, that changes your world; you don’t feel a sense of loss, there’s no drop. And yet, you setyourself up saving 15, 16, 17% A totally different world than three or nothing, obviously.

The second piece I brought this up for is: it’s great to get in the game but, oh my God, don’t get in thegame ‘till you understand the rules, ‘till you’re an Insider. So I go through the nine biggest lies: they’reinvestment lies, they’re Wall Street lies, however you wanna call them, but they’re marketed lies.There’s a reason you believe them.

Tim @ 6:30:Very heavily-marketed lies.

Tony @ 6:31:Very heavily-marketed, to the advantage, right? One of those is this idea that they’re gonna beat themarket! Here’s the real facts: 96% of all mutual funds in a 10-year period will never even match themarket. You’re paying a premium: you could’ve owned an index that cost you 20 basis points atVanguard. Instead, you’re paying - they say - 1%. You’re asked by people: “Oh, it’s just one percent?”In reality, Forbes has shown: the average mutual fund, when you put all fees in, if you read theprospectus, there’s all these “21-b, trading fees” - all these things they don’t call fees, but they’remoney out of your pocket. The average is 3.1 percent.

When you do that, here’s the problem:

Number one: only four percent - what’s your chance of picking the four percent of mutual that aregonna succeed? If you go for Morningstar, you’re screwed. I can show you, statistically, Morningstar’sown statistics has shown the ten year period, of 250 people that made it to 5-star Morningstar, 4 areleft. Doesn’t work that way. If you could pick the four percent - if you were magically able to do that -you could do alright, but the four percent’s always changing. Your chances of picking the right mutualfund are 96% against you. The average person’s 401(k), they don’t know how to evaluate this. Theytry and pick it, so they’re screwed. And then you get poor performance and you pay somewherebetween ten and thirty times more for the same investment you could’ve got for ten to thirty timesless. It’s like the ultimate insult to injury, and you go: “What, does that matter?”

First, let me give you this so people understand what 96% means, or getting a 4% possible successrate. If you and I play Blackjack - most people know how to play, right - twenty-one. You get two facecards, that’s worth twenty points. If your inner idiot says: “Hit me!” You’ve got face cards, you’re goingto twenty-one - you have an eight percent chance of success. You have a greater chance of successthere than if you were trying to find the right mutual fund. Now, what’s your chance of success ingetting financially free when - here’s what’s unbelievable. If I said to you: “Here’s an investment I wantyou try, Tim. Here’s how it works: You put up all the money. You put up all the risk. And I will put up nomoney and I will put up no risk. If you win, I get up to 60% of your entire growth of what you have overthe lifetime of your investing.”

You put up all the money, I take no risks, I put no money in. And if you lose, you lose but I don’t loseanything. That’s a deal that most people say: “I’d never take in a million years.” That’s the averagemutual fund. For every 1% you pay, it’s 20% over the lifetime of your investments. Just like there’scompounded growth, there’s compounded fees.

Tim @ 9:07:Right.

Tony @ 9:07:So Bogle showed me: 60%! And I’m saying: “Jack, how is this possible? How could people be doingthis?” He goes: “Tony, it’s the $13 trillion lie, and it’s called one thing: Marketing.”

Tim @ 9:15:Yeah.

Tony @ 9:16:Marketing! He said: “I’ve been in the business 64 years; it makes me crazy, and people still do it - thevast majority of people put their money in a mutual fund.” Now, he’s come to be the largest mutualfund in the world with an index fund: $2.5 trillion. Most of the smart money is in there; it’s not theaverage person’s money that’s in the index, today. I go through these lies and what you don’t know inthe financial world will hurt you. The one you’re talking about is just the average rate of return: youwanna be seduced. When you look at the rate of return, Bogle said to me: “Tony, whatever you see,what the rate of return was, you’re trying to evaluate that mutual fund based on its past performance,just know that number’s not accurate.” Dalbar did an incredible study, 20-year study. They found theaverage mutual fund owner, over a 20-year period of time made 2.5% net. The market was 9.7%.That oughta give you a sense.

I went to go do this book, I won’t mention the person’s name; I got all these incredible endorsementsfrom everybody: Nobel Prize winners, self-made billionaires, all these guys. There’s a particularperson, a really good friend, and I won’t mention his name. It was ironic: he wrote me back and said:“Well, my team’s read it and they really don’t think it’s that special.” Well, I’m not insulted by that, but itdoesn’t make sense to me. This person has six mutual funds.

Tim @ 10:30:[Laughs]

Tony @ 10:31:[Laughs] It’s like: okay, I get it, dude.

Tim @ 10:32:Don’t ask a barber if you need a haircut!

Tony @ 10:34:It’s my fault!

Tim @ 10:35:Yeah! [Laughs] “Sorry about that one!”

Tony @ 10:36:I shouldn’t have asked that question! I shouldn’t have told him.

Tim @ 10:39:I should point out to folks also, that some people are very math-phobic. Part of the reason I went toPrinceton - it was funny, I was reading Carl Icahn’s story and how he was told he would never get intoany Ivy League schools.

Tony @ 10:54:Yes. Yes.

Tim @ 10:55:And he chose Princeton. Same thing happened to me: I was told I would never get in..

Tony @ 10:58:Wow!

Tim @ 10:59:…to a whole host of schools, because - and this is kind of like your mutual fund guy - humansrespond to incentives.

Tony @ 11:04:Yes.

Tim @ 11:05:And this particular guidance counselor is incentivised for what? To optimize, to be able to say: “X% ofstudents got into their first choice school.” How do you do that most easily?

Tony @ 11:15:Lower their expectations.

Tim @ 11:16:Lower their expectations. But I am intrinsically not someone with a lot of math background. Part of thereason I chose Princeton over other schools is because they didn’t have a math requirement. And Ithink for a lot of people listening they may be like: “Oh my God. Percentages and Compounding. It’svery overwhelming!” I think part of the reason your book had to be as long as it is - and a book shouldbe as long as it needs to be - is that if you were to try to compress into 100 pages, it would be likewatching a 3-hour action movie but getting a frame every five minutes.

Tony @ 11:47:Yeah

Tim @ 11:48:You wouldn’t - it would be too much in too little space. but when people read the book, when I readthe book, you’re leading people in a logical progression from building block to building blockto building block so that by the end, people are very, very savvy. And so people who might bethinking: “Oh my God! This is really a lot for me to absorb!”

Tony @ 12:07:I probably talk at 100 miles an hour. In the book, I’m telling you stories too.  I think the stories take itaway so it’s not numbers; you go: “Holy shit. If me and three of my friends all put aside the sameamount of money and we both get a 7% return, but my buddy’s getting fees of 3%, my other buddy’s2, and I’m 1, and all three just put in a million bucks or a hundred thousand in, the person with 3% infees ends up with 65% less money.”

They got the same rate of return, they start the same amount of money over the same period of time.I think when you see that with real people’s lives, you start to go: “I don’t have to know the math; I justknow one thing: Fees Matter. And I’m gonna cut those babies to the absolute base.”

Tim @ 12:48:Definitely. And I’d love to talk, you brought it up a little earlier. Uh, Ray Dalio and asset allocation,‘cause this is something I’ve been thinking about a lot, considering that, uh, due to paper gains, I’d

say I have a very, very, very, very high double digits of my entire net worth in tech. Uh, and, it’s hard -unfortunately - to rebalance when you have a lot of private stock that can’t be traded! [Laughs]

Tony @ 13:10:Yeah, of course. Been there.

Tim @ 13:12:Uh, but [Laughs] you know how it is. But Dalio’s someone I’ve been fascinated by for so long; uh,maybe you could talk about the All Seasons and some of the stuff that you chatted with him about asit relates to Asset Allocation.

Tony @ 13:27:It might be helpful for people to take a second and give people his background. Ray’s not the guy youwould think of as master of the universe; he comes from Queens, his dad was a jazz musician, hismom was a homemaker, really lovely lady. He went from, you know, very low middle class family anddecided that he wanted to go work at a golf course. He bumped into, you know, one of the things I talkabout is: Proximity affects your life, who you’re in proximity with. And he’s in proximity with verywealthy people, they’re talking about stocks, and he got fascinated by it and got hooked on theprocess and got involved in the stock business. But he got involved in a time period when the worldwas incredibly volatile in the 1970’s; we’re all shaped by our time periods, right? So if you canimagine, you know, that’s the time we had this massive inflation, where Nixon goes on television andsays: “We’re going off the gold standard” - money as you know it called the U.S. Dollar, we’re notgonna back up with anything. He thought for sure the markets would just be destroyed. The AmericanDollar’s gonna be worthless. And then they had what was called the Nixon Rally. It shook him to hiscore: that as much as you think you know, you don’t know. It gave him a lifelong focus that says Ialways wanna be asking: “What do I not know? How do I understand the system as a whole, not justmy perspective on the system?” So he started Bridgewater, in fact, my friend Paul Tudor Jones gavehim some of his initial capital to do this and is wishing he didn’t loan it to him but would’ve kept it asan investment, I think, at this stage.

Tim @ 14:47:[Laughs]

Tony @ 14:48:Because Bridgewater became so gigantic. But what happened was: he’s the guy the U.S.Government went to when they’re trying to figure out how to design T.I.P.S. He’s the guy that whenMcDonald’s is trying to come out with McNuggets, and they’re trying to figure out: “How can we makesure we have enough supply of chicken?” He’s the one that figured out the math of futures and whatto do so McDonald’s could even do that. That’s the way this man’s brain works. Over the years, hebuilt this Alpha fund and it’s very intensive, and he’s lost money three times in 23 years. And the fundhas returned 21% compounded for 23 years, just mind-boggling - before fees. And then [Ray] turnedaround and after all these years, said… Everybody talks about, you know, different stage of your life,you wanna protect yourself, so you do a balanced portfolio: 50-60% in stocks, maybe. 40-50% inbonds. When the stocks are more volatile, the bonds are gonna balance you out. He says: “Didn’tlook that way in 2000, it all went down in 2008.”

Over the years, he said: “This is a story everybody buys but it’s not reality.” He began to pursue, hesaid: “What if I wasn’t around? I need an almost-passive form of investment, something that wouldn’ttake 1500 people, that my kids could use, that would support all my philanthropic efforts if I wasn’there.” He questioned everything about asset allocation that everybody’s ever been taught and cameup with a different way of looking at it where he basically said: “There are four things that move the

price of any investment: Inflation/Deflation, and whether the economy is growing or shrinking.” Thatcreates four different seasons, in which - every type of investment: stocks, commodities, gold, realestate - has an ideal environment in which it grows and environments in which it will absolutely slam.He figured out: what’s the right combination of these things so that I can reduce the risk to the lowestlevel of loss possible. Warren Buffett’s rules, everybody talks about the rule, right? It isn’t WarrenBuffett’s rule; it actually comes from his teacher. Rule # 1 to investing: don’t lose money; Rule # 2:See Rule #1.

So how do I make that happen, but also maximize the amount of upside: as much upside aspossible? He called it his all-weather fund, ‘cause it works in all weather, and he did all his owninvesting in it for ten years, and he back-tested it all the way to 1925 and said: “Oh my God; I havediscovered something unbelievable.” The only people who got to use this is: himself and finally hisclients, the $5 billion net worth, the governments and pension funds. I’ve read about it and Ray doesvery few interviews, as I’m sure you know; if you’re online, you won’t find a whole lot, you know? Infront of Congress, maybe in Davos every now and then; he kind of avoids any publicity and so forth.

I did all my homework on him: Paul Tudor’s one of his dearest friends, arranged to go see him, studiedall out. I was prepared and I go into this meeting, and I started to ask him, I asked him I askeverybody: If you couldn’t pass on any of your money to your children - none - all you could pass onwas a set of principles, an investment strategy, and a portfolio, what would it be? For your kids - theydon’t have your skill. Everybody gave me different answers. His answer was: “Well, it would be my all-weather approach.” So: “Explain to me how it works.” He explained it - just like me telling it to you, realfast, people are going: “I don’t have a clue what he just said. It seems logical.” The one thing he saidis: “Tony, when people think they’ve got a balanced portfolio - stocks are three times more volatilethan bonds - so when you’re 50/50, you’re really 90/10.”

Tim @ 18:15:Yeah.

Tony @ 18:16:You really are massively at risk. That’s why when the markets go down, you get eaten alive. So hehas this portfolio and he describes its principles. I said: “You know what, Ray? This is spectacular, Iunderstand it. The only way you really get the result from this is if you knew the exact percentages.” Ifyou’ve got somebody’s recipe and you put in a gallon when they put in a teaspoon of a particularingredient, you messed up. So I said: “I need the secret sauce!”

Tim @ 18:41:Yeah.

Tony @ 18:42:And he looks at me and laughs and goes: “Tony, that’s my business.” That’s when he gave me thewhole $5 billion net worth, and, you know, gotta have $100 million.

I said: “Yeah, Ray, but you just gotta tell me; you haven’t taken anybody’s money for 10 years, andyou’re not gonna take anybody’s money!”

He goes: “Yeah, but it’s really complex.”

And I said: “I know it is! But give me a simple version.”

And he said: “No, it’s always changing.”

I said: “Give me a version with no leverage that the average person can do. You just gotta tell me, theygo to their broker, their wealth manager, their mutual fund’s not gonna work. So help the little guy out!I know you care!”

I started teasing him, I said: “Come on! Give me the juice!”

He started laughing, and he said: “Well, I could give you something - wouldn’t be perfect.”

I said: “I don’t want perfect; your worst design will be the best design anybody else will ever come upwith.”

He said: “Well, we might do…” And he lays out this simple strategy…

Tim @ 19:24:Mm-hmm.

Tony @ 19:24:And I was vibrating._I was like _vibrating. I knew what his generosity level was; it was unbelievable.He’s never revealed it to anyone in history. And I ran as fast as I could, I got in the helicopter, flewback, went to the guys at Hightower. I went to the guys at two other firms and I said: “I want you to runthese numbers. Show me the modern period - the last thirty years. What really happened with thisformula? Every single year for thirty years, what’s the overall for the thirty years?” I look at thirty years- 1984 - that’s when we finally had cellphones, even, right? That’s when the world started to shift.Show me forty years and show me seventy-five years. Take me back right before the Depression,even. And the guy texted me in the middle of the night - he never texts me - and he says: “Have youseen the numbers?” I’ll never forget: I get up and call him on the phone and said: “What? No, I haven’tseen them.” He e-mails them to me. And Ray was right, 85-86% of the time, every time period welooked at between 85 and 86, 30 years, 40 years, 75 years. By the way, that’s being liberal ‘cause the15% where he lost money, the most he ever lost is 3.95 per cent in seventy-five years. And that was2008 when the market was down 51% peak to trough. The average loss including that was 1.9%. Forexample, one of his losses is .03; really, it was break-even, but we called it a loss ‘cause technically,it’s a loss. If you could go to Vegas and you knew that for 75 years, the strategy you used had beensuccessful 85% of the time and that when you lost, the most you lost was 1.9 percent, how muchwould you bet, how long would you continue to gamble on this - it’s not hard to figure it out! Imismatched, I took it to some very large institutions and they’re like: “I’ve never seen anything likethis!” So a couple people said to me: “Don’t put this in the book; this is a business, man! This’ll giveyou the lowest level of volatility, the highest level of return, it averages just under 10% return with thatlevel of volatility; it’s mind-boggling!” I said: “You know what, that’s not the spirit it was shared in. Wecan do this for people, if they wanna do it, we can give that option. But I’m putting it in the book soanybody can do it.” And it’s in the book! And, you know, it’s not the only one! There’s strategies foreverybody, but it’s one of the more exciting ones you’ll see.” 

Tim @ 21:38:Is there anything - totally up to you - but just, is there anything you can share from what he told youabout the All-Weather?

Tony @ 21:46:Well, the.. I don’t..

Tim @ 21:46:

And I will just say as a preface, there’s so much in this book. Number 1: I’ve had also people say tome, for instance - I’m not gonna name any of my close friends - “Yeah, Four Hour Body, blah blahblah, it’s fine; give me the index card.” I give them the index card and there’s context missing - 

Tony @ 22:01:Exactly!

Tim @ 22:02:And it’s not just because they can’t in some cases, do it, because they’re missing the detail and theywon’t do it. Get the book, do yourself a favor.

Tony @ 22:10:I’m not holding back; the reason I wouldn’t share that is because it would be out of context. Even inthe book, I tell people in the first chapter; I tell them this result, I give them one example. I said: “Iknow the first thing you wanna do is turn to that section of the book, and you can do it; but I cautionyou - there’s a syntax, there’s a sequence.” The dog bit Johnny, Johnny bit the dog - and if you will gothrough this sequence, it’s gonna mean more. If you know that portfolio, but you don’t know, truthfully,what your risk tolerance is? You don’t know truly what your personal goals are, you don’t know whatyou need to avoid in the fee structure and the tax structure? That return won’t be very great for you!More importantly, you won’t go through the psychology that’ll make you actually follow through for awhile. But if people wanna do it, by the way.. I then went to, uh, Hightower, which is the fifth-largestregistered investment advisory in the United States: $30 billion in assets, 13th fastest-growing, IncMagazine company, fastest growing company: amazing. Elliot (Weissbluth) the CEO, blown away bythis man; they do an interview with him and I left, they’re going: “This man is committed to totaltransparency. This man blows out all those fees, all those..” - to say it in the nicest way possible -“..screwing over that happens to most clients. He eliminates that.” He’s a former litigator, he’s got amoral code that’s pretty intense; I loved him. I came back and I call him up and I said: “Let’s meetagain.” When we met again, I said: “I got a challenge for you; how about you do this for everybodyelse?” He said: “What are you talking about?” I said: “How about for the average man that reallyneeds it? He said: “What are you talking about?” I said: “Bring that ultra-wealthy advice to them. Showthem on a small scale how they can do what your ultra-wealthy client does.” He goes: “Tony, you can’tmake money doing this.” I say: “You don’t need to make money doing it! I’m doing a book, I’m notmaking money to do it! A part of our life has to be for something more. I know that’s what you’reabout; I’m not taking it up, putting your business at risk. Let’s use technology. Technology with livepeople: the balance.”

Tim @ 23:50:Mm-hmm.

Tony @ 23:51:And so we built, together, a site, I put them together with this group called Stronghold, which isbrilliant; they’ve been managing my money for me for, uh, seven years. Ajay Gupta, he’s actually theperson that Charles Schwab put on the cover of Most Magazine as kind of the face of the 10,000registered investment adviser fiduciaries around the world and around the country. And the two ofthem got together, created a site - it’s kind of like “Check your Broker.” So now, you can go online, andyou can put in all your accounts, it’ll aggregate them - it’s a patented technology - you get to see.. A:What your real costs are and everything, all in one picture, so there’s no B.S. first is what you couldhave the same investments for-

Tim @ 24:27:Right.

Tony @ 24:27:Right? It’s like: “Why would I pay more?” Second thing it does is it shows you what your real returnshave been - combined - versus what you think they are. And third, it shows you what your volatilitylevels have been, the amount of risk you’re taking, so you know. And then fourthly, it does acomparison to that versus other portfolios including the one designed by Ray Dalio. You can go:“Wow, I wanna do this!” If you’re a person like half the U.S. - less than $25,000 investable assets - youget to do the whole thing for free. It’s given to you, you go do it. If you are not, you have more, you canstill do it for free: you can do it yourself. Or you push a button and say: “I’d like you to become myregistered investment adviser.” And somebody can do it. So I remembered saying: “Most of thepeople you’re never gonna see anything from, but wealthy people started not wealthy.” Right?

Tim @ 25:04:Right.

Tony @ 25:05:And so, it’s really cool; it’s one of those few - as corny as it sounds - win-wins. Right, these guys areadding value, I got them to do it, and now they’re proud of it - they’re excited. So it’s, it’s a cool thing.So-

Tim @ 25:14:What is the URL?

Tony @ 25:16:Uh, the URL is, uh… what is it… strongholdfinancial.com - I gotta double-check, but I’m pretty sure.

Tim @ 25:21:Okay; we’ll double-check that and it’ll also go in the show notes, guys.

Tony @ 25:23:You got it.

Tim @ 25:24:Uh, you were saying, to answer my question. I didn’t wanna cut you off…

Tony @ 25:28:Oh. Which one? Sorry

Tim @ 25:30:[Laughing] We have a lot of questions. 

Tony @ 25:31:Which one? [Laughs]

Tim @ 25:32:Uh, you know what? Let me highlight a couple..

Tony @ 25:35:Oh, yeah let me answer. I said: “I don’t wanna come here because even in the book, I don’t do it untilyou get there; it won’t mean anything to you.” I’m not holding anything back, you can go to thebookstore, open it up and read it, not pay anything. I don’t give a shit. But I think you’d be doing

yourself a disservice; what you really wanna do is take yourself through the process so that when youget to that point, you can decide: “Do I want that Dalio to be 20% of what I do? 5%? 10%? None?Fifty?” ‘Cause there are many different strategies in the book. Including, as you said, David Swensen.David Swensen is the most successful institutional investor of all time from Yale. He went from $1billion, took their money from $1 billion to $23.9 billion. $24 billion, now, in two decades. He’s a rockstar. Nicest human being you’ll ever meet in your life, and doesn’t get paid one-tenth of the rest ofthese guys; it’s his dedication to Yale is why he’s there. I mean, he could leave there and be in atotally different place. When he had cancer, the man said: “Listen: I’m not going anywhere, this is mybucket list, is to be here and continue to serve at Yale.” A man of such unbelievable integrity and hegave me his exact portfolio - it’s in the book also. He actually gets a higher return - to give you an idea- than Ray does, but you have to go through a hell of a lot more volatility, obviously. That’s why yourrisk, you see, you gotta know what your real-

Tim @ 26:39:Yeah.

Tony @ 26:39:What you think your risk-reward is in your mindset versus what it really is. You’ll know when you gothrough the book.

Tim @ 26:44:If I can make a request..

Tony @ 26:45:Yes!

Tim @ 26:46:I would love to you to interview the guy who hired Swensen for Yale, ‘cause talk of the best hire of alltime!

Tony @ 26:51:No kidding, no kidding.

Tim @ 26:52:I mean, just the psychological profile of the guy is so unique.

Tony @ 26:55:Yeah.

Tim @ 26:57:Uh, so couple things I’d love to just underscore for folks. The first is - and again, this is pulling stufffrom the book, I’m gonna paraphrase some it, but - I think it was Dalio who said something along thelines of: “Losers react, winners anticipate.” Uh..

Tony @ 27:12:That’s actually me, but that’s okay.

Tim @ 27:13:It’s you!?

Tony @ 27:13:

I’ll give it to Ray Dalio! [Laughs]

Tim @ 27:14:You know what, take that as a compliment! [Laughs] But the point being that the, uh, and I guessMark Twain quote is also in there, which is: “History doesn’t repeat itself, but it rhymes.”

Tony @ 27:26:Yeah.

Tim @ 27:27:So there are going to be crashes; there are going to be black swan events. And you want to have aplan in place for when that happens.

Tony @ 27:35:Exactly right.

Tim @ 27:36:And the more you can automate your.. many of your financial decisions, you know: “Know when tohold ‘em, know when to fold ‘em.” And actually have a plan going in. So if you buy something andhave no plan for selling it, you’re gonna be subject to sort of impulse reactions that will cause you todo what the vast majority of people do: they buy high and sell low. So what, what, is in this - whatwe’re talking about when we talk about asset allocation, among other things - just to sort of, uh, try to,try to distill it for people as a concept, is that you have uncorrelated or inversely correlated “buckets”so that if one portion of your investments goes down because of inflation, deflation, fill in the blank,there are others that go up which mitigate your risk.

Tony @ 28:21:That’s correct.

Tim @ 28:23:And what you notice - and I live in Silicon Valley, I’m very involved with tech - that’s sort of been mysandbox for the last, uh, close to ten years, I guess. What you notice about the best - okay: 95% totalk about venture capital is very similar to mutual funds. The vast majority are horrible. As a class,they’re terrible.

Tony @ 28:45:Yeah.

Tim @ 28:46:However, if you pick the unicorns - and you use the same term..

Tony @ 28:49:Reid Hoffman or someone like that..

Tim @ 28:51:Yeah, yeah. There are a handful who were very very consistent. And so what I’ve tried to do, just likeyou did with a lot of these hedge fund managers is look at what separates them. And what separatesthem is you have the vast majority of tech investors who think high risk, high return. “I’ve gotta swingfor the fences; I’ll be okay as long as a third of my startups lose money, a third break even, and a thirdmake money.”

Tony @ 29:17:Wouldn’t it be nice if life worked that way? [Laughs]

Tim @ 29:18:Yeah! Doesn’t work that way! Whereas the guys who are really good realize that there’s a paralleldistribution: one or two of their investments are going to make up for all of the losses. The very top ofthe top - even though they don’t talk about it publicly - if they have a lot of their personal money atplay, have thought a lot about asset allocation. So they’re heavily invested in tech and it might have anIPO, blah blah blah. They have an entire basket of shorts on the NASDAQ..

Tony @ 29:47:Yes.

Tim @ 29:47:Or whatever it might be so that, by the way, it’s not always high risk - high reward. If their tech goes tohell, they have enough money that is betting it’s gonna go to hell that they don’t lose a lot of money, ifat all. Or maybe they even make money!

Tony @ 29:59:That’s absolutely true.

Tim @ 30:01:And, uh, so I think the, um..

Tony @ 30:03:A way of doing it that you’ve mentioned. I think your brain may have been going in this direction -maybe I’m wrong. But Ray Dalio actually said something in there that stuck with me, brutally. He said:“I don’t care what it is that you think that you’re great at investing in, or you like. Most people invest inwhat they like: real estate or stocks or bonds or what they think they’re good at, or what they wereraised with. He said: “Whatever asset class you invest in, I promise you: in your lifetime, it will drop noless than 50% and more likely 70% at some point.”

Tim @ 30:31:Yep.

Tony @ 30:31:And he said: “That is why you absolutely must diversify.” You’re gonna say: “But I can make so muchmore on this side!” And you know, I’ve had people throughout the years. I teach this market theory:this idea that if you don’t wanna do it, make the asset allocation simple. It sounds like such a bigword.

Tim @ 30:44:Yeah.

Tony @ 30:45:It’s just buckets. Some of my money’s gonna go in the secure bucket. That bucket is like a churchsteeple; I’m gonna.. It’s not going away. It’s very secure type of investments; its upside is not giganticin terms of speed. But you know what? Compounding process: If you give it enough time, those lowreturns are giant returns, still. But you’re not gonna lose. And then there’s this bucket called.. well,most people call it “Growth Bucket” and I call it “Risk/Growth.” ‘Cause it’s really risk first.

Tim @ 31:09:Yeah.

Tony @ 31:09:And on that, I’m taking bigger risks for potentially greater rewards. And now the question is: “How do Ibalance these?” Am I 60-40? 50-50? 80-20? And that’s designed, really, by three things: Number one,what’s your real risk tolerance - not what you think it is?

Tim @ 31:22:Yeah. And they’re never the same.

Tony @ 31:23:They’re never the same. You know, I do these Wealth Mastery Programs for years. Invariably, I’ll dosome crazy thing like I’ll say: “Everybody, stand up. Make change.” They look at me and they startreaching in their pockets and making change. And so somebody’ll pull out $5, $10. Somebody’ll pullout $100 and someone’ll come up and take it and give them five bucks. And they’re like, you know;they don’t know how to react. So this goes on for three or four minutes, the music’s going on; I go:“Okay, stop. Right, sit down.” Then I go on and talk about something else. And invariably, somebody’slike: “Hey, wait a second! I want my $100 back!” I say: “What are you talking about?” They say: “I wantmy $100 back, the game’s over!” I said: “What made you think the game was over?”

Tim @ 32:01:[Laughs]

Tony @ 32:01:Right? And who said it was your $100? It takes a while but they finally get, you know? “I’m stressedabout $100.” What do you think is gonna happen when you lose $1 million? Or half a million? Or $100thousand? Or ten grand? I mean, your risk tolerance is not what you think it is. So when we find outwhat your risk tolerance is and we’ve got great ways to do that in the book. And then you figure out,really, how much time do you have? When you’re younger, you got more time to make mistakes, andso you can take bigger risks. You’ve got a time line on your part. The next piece is how much is yourcash flow? If you look at those three things, now you can decide how much goes in my securitybucket, how much goes in my growth. And if you don’t make that decision, it’s the most importantinvestment decision of your life, according to everybody I’ve ever interviewed. Like, what percentagesecure, what percentage growth and risk? Then when things come up, you’re always gonna go for thegrowth-risk, ‘cause it looks so sexy and exciting. And I can’t tell you how many people over the yearshave done this: They’re telling me “Why would I put money over here when I’ve got this real estate?I’m making 120%!” I have a friend that built some of the first big condos in Vegas back in the boomtime. And he actually went to my programs, sold the business, he had made $200 million, invested inthese condos, started building the Panorama Towers and places of that nature. And he was up to,like, three-quarters of $1 billion; I kept saying to him: “Dude, take some of your growth money and putit in the secure bucket, right? How many times have I told you this?” He goes: “Tony, I love you; Imade $200 million ‘cause of you. But now, you know, all I touch goes to gold!” I’m listening and I go: “Ilove you, brother. But you know how many times I’ve had this conversation?” And then, guess whathappens in 2008? How much do you think he’s lost? He was worth three-quarters of $1 billion, grownthat rapidly in those short years. What do you think happened to his net worth?

Tim @ 33:37:I’m guessing it went down, according to the Ray Dalio prediction.

Tony @ 33:40:

How about minus $400 million?

Tim @ 33:43:Ugh.

Tony @ 33:43:He didn’t just lose what he had; he lost everything he had and beyond. So then he’s trying tonegotiate.

Tim @ 33:48:So he was leveraged..

Tony @ 33:49:He was leveraged out! Wiped himself out. Most people don’t put enough in the security bucket, is thelesson. And a guy like Dalio provides you a strategy that’s got great sustainability, but there are manyapproaches in the book. But you do have to decide how much is secure, how much is growth. And Ishow you how to do that.

Tim @ 34:04:And now we gotta emphasize, at least, I’d be curious to hear your thoughts, Tony. For me, it took me along time to think, to realize what investing represents for me. And it’s not maximizing return, it’smaximizing quality of life.

Tony @ 34:17:Yes.

Tim @ 34:18:And there’s a big difference.

Tony @ 34:19:Yes.

Tim @ 34:20:Uh, and for me at least, I have a very kind of barbell strategy where I have.. super super safe stuff andthen the startup stuff, but I need to modify that - I want to modify that. Because it’s not currently allseasons, at all.

Tony @ 34:36:Yes.

Tim @ 34:37:And, uh, the, um, sort of.. For people out there who might say: “You know, I don’t wanna think aboutit.” I would just emphasize that you’re making decisions every day about where you allocate your time,your money, your resources. Whether or not you wanna call yourself an investor, you are an investor.

Tony @ 34:54:Totally true.

Tim @ 34:56:If you make no decision, that’s also a decision. It’s important to become literate, I think, with a lot ofthese basic concepts, which is not difficult.

Tony @ 35:04:I wanna say a bit about that. People need to remember that everybody’s a financial trader, but mostpeople are making a bad trade. ‘Cause they’re trading Time for Money.

Tim @ 35:11:Yep.

Tony @ 35:12:Worst trade of your life, ‘cause you can’t get more time; we all know it. So what this book’ll do, if you’rewilling to just give yourself a chapter a day for a month, or go crazy in a weekend? You’ll go from,maybe not even knowing what these terms sound so complex to being juiced. ’Cause you’ll be aninsider; you will look at the world in a totally different way. You’ll go: “That is the biggest rip-off onearth. That won’t ever happen to me. That is where I wanna go.” You know, make some decisions andthen it’s not an everyday thing! Literally, you might do re-balancing once a year for fifteen minutes! Imean, unless you’re gonna be a trader every day, this shouldn’t dominate your life! When did you giveyourself the initial education about one of the most important areas of your life? There’s only a fewareas that really impact the quality of your life: your body, your emotions, your relationships, yourfinances, your career or your business, the spiritual side of your life. How do you use your time? Abouta half-dozen or so, maybe seven areas that really affect you. Most people, major and minor things:they know so much more about shit that doesn’t matter!

Tim @ 36:07:Yeah.

Tony @ 36:08:So I’m saying to people: “Give yourself the gift of just a short burst of time so that you can truly look atlife and be good at this area.” If you want someone to do it for you; you can, but at least, then, youlead them.

Tim @ 36:19:Yeah.

Tony @ 36:19:You’re not being led by them, right?

Tim @ 36:21:No, definitely. And I think that, uh, just like one of the things that sort of changed my world in startupinvesting was: any company you invest in should be able to return the fund. Just as like a general, theamount of money that you’re investing over X number of years. Just like the, sort of, $1 to $5..

Tony @ 36:38:Yeah.

Tim @ 36:38:..principle, with Tudor Jones. And there, there are a couple of pithy heuristics, like rules-of-thumb, thatI think will change how you view not just money or stocks, but the world in general. Such as, assume -in the Dalio, uh, case - that, you know, your favorite area, your kind of “pet” investment bucket is goingto decrease by at least 50% in the next, you know, X period.

Tony @ 37:03:

Fifty to seventy.

Tim @ 37:03:Fifty to seventy! Even better!

Tony @ 37:05:[Laughs] Seventy will get your attention.

Tim @ 37:06:Yeah, that’ll get your attention. Yeah, and plan accordingly, right?

Tony @ 37:09:Yeah.

Tim @ 37:10:And, uh, I think that, um.. It’s been a very very fun process to read this and also to connect with youover it. Uh, lemme ask you, if I could - ‘cause I know, uh, you’ve got a lot planned, and, uh, I alsowanna finish up the last few interviews. [Laughing] In the book, reading the ones that you did. Uh, I’mcurious if there are any particular funny stories. What was the funniest story or interaction you hadwhile researching or writing this book, that comes to mind?

Tony @ 37:35:Well I think I shared one of them already; it’s funny now, wasn’t so funny in the moment. Walking intoCarl Icahn’s office, so excited, so prepared, ready to rip open. This is a guy; he’s got the greatestreturns of anybody out there; and very few people know that. Kiplinger did the first review that reallyshowed all the numbers. I mean, if you’d invested in him in 1968, you’d have a 31% compoundedreturn within his firm versus at Buffett’s firm: you’d have a 20% return. People think of Buffett as theultimate guy. So, you know, I got all these facts, figures, I’m excited; and to have him literally throwingmy video crew out the door and then telling me: “No audio!” [Laughs] I’m like: “How the hell am Igonna keep up with this guy and capture the notes?” So that’d be one. A fun moment was introducingCarl Icahn to Jack Bogle - they didn’t know each other, and they’re fans of each other. So it’s like Icame from being an outsider to now introducing them. Most of the time with these guys wasn’t asmuch funny as it was fascinating. It was just seeing the level they play the game. Like a really greatpoker player. It’s like they know the psychology; they know the numbers. They know the probability.Then you just realize why most people are never gonna win, because, you know, they’re not gonnawin gold medals against these guys who are playing this game day and night, night and day, youknow? And some of that isn’t new to me because Paul’s been my dearest friend for, you know twenty-one years now. But it’s fascinating to see that in every industry, in every sport, there are few playersthat play at the highest level. And they have one thing in common above all else: hunger. But it’s anunquenchable hunger. You have that hunger, I see that in you; that’s why I’m a fan of your work. It’slike you’re gonna keep finding the answer; doesn’t matter what answer you got - you wanna knowmore. And every one of these people has that. And it’s fun to be around them because there’s energyin every one of these people. They have different styles, but there’s an energy, and that energy isdriven by that desire, that hunger to know more.

Tim @ 39:22:And the other observation, uh, that was reinforced by reading the book was that they also- they haveprinciples; they have the operating systems that they use. Whether you are trying to lose weight,trying to quit smoking, trying to improve your investment returns, you can ensure against your lesserinstincts by having a system.

Tony @ 39:45:That’s right.

Tim @ 39:46:And putting systems in place so that when you have the impulses that are going to lead to yourdestruction: eating a cupcake when you shouldn’t.

Tony @ 39:54:Yes.

Tim @ 39:55:That you can mitigate against that. And it’s possible you can set these things up in advance. Uh, Iwould love to - before we wrap up - just ask a couple of rapid fire questions.

Tony @ 40:02:Sure; go for it.

Tim @ 40:04:Okay. Uh, when you think of the word “Successful” who is the first person that comes to mind?

Tony @ 40:09:Gosh. Uh, I like Richard Branson; I don’t know why that’s the first thing that popped into my headwhen you said that. Only because I think he lives so passionately, he lives life on his terms: there’s nobullshit with him. He’s having a good time, he’s close to his family. Uh, lives on an island like I do?[Laughs] Extraordinary leverage and a very conscious man: about society and what to do. His EldersProgram and things like that; he’s very socially-conscious, and yet still has a great time. So he’d beone of the first people, I think of, probably.

Tim @ 40:39:Uh, what have you changed your mind about over the years? Any positions you’ve taken that you’vereversed, since?

Tony @ 40:45:Uh, you don’t have to be perfect in everything you do, including not eating anything enjoyable[Laughs]

Tim @ 40:50:[Laughs]

Tony @ 40:51:Probably be a big one, my wife would tell ya. Gosh, over the years, you’re always updating. I mean, Idon’t look at it as changing as much as updating and informing myself, you know? If you thought of itas changing, I think you’d find resistance within your own consciousness or your own identity. And youknow identity plays such a strong role: the need to be consistent with what you believe. And that’s whythe political system’s so messed-up: somebody can actually grow and they’re seen as inconsistent.

Tim @ 41:14:Yeah. Oh, it’s a mess.

Tony @ 41:15:It makes the political system not grow, it makes the system locked in place. So I don’t look, think

there’s anything that comes to mind just real directly. But I think there’s a constant upgrading. Andsometimes it’s those two millimeter upgrades that provide the biggest impact.

Tim @ 41:29:Yeah. Uh, side note for folks: it’s also common among the top venture capitalists and investors - MarcAndreessen, who created the graphical web browser. One of his mottoes for Andreessen andHorowitz is “Strong opinions, weakly held.” So he’s ready to be corrected or updated as youmentioned. What would people be surprised to know about you?

Tony @ 41:51:Oh gosh. You should ask my wife that question!

Tim @ 41:53:[Laughs]

Tony @ 41:55:[Laughing] I don’t know; some people would not be surprised at all. People in my events would know:I’m a love bug. I’m the kinda guy that can be brought to tears just by seeing someone do the rightthing. And yet, I’ll run through that wall, shake the building with ten thousand people in it. I’m a softie,really, truly, underneath it all; that’s what drives all this in me.

Tim @ 42:12:Okay.

Tony @ 42:12:I love to see people lit up, I love to see people happy, I love to see people freed.

Tim @ 42:17:So I’m gonna ask an unusual one given that answer. Uh, what’s the first face that comes to mindwhen you think: “Punchable?”

Tony @ 42:22:Huh! Punchable?

Tim @ 42:24:[Laughs]

Tony @ 42:25:Oh my gosh. Well I had an interesting meeting with President Obama! [Laughs]

Tim @ 42:28:[Laughs]

Tony @ 42:30:Um, it was actually interesting. It was, it was, I was invited by Marc Benioff to, uh, come. It was for, Idunno, fifteen of the, you know, billionaires there at Silicon Valley. I was in San Jose, and it was for thepresident, before his reelection. And I voted for the president, you know? I’ve been a fan of thepresident but I was getting more and more frustrated by watching the style of politics, which was, youknow, creating greater and greater division. There was, it seemed to me, a great level of inaccuracy inthe promises being made that were very hard not to see. And that time, it was the whole thing: “We’regonna raise taxes on the rich, and that’s gonna balance the budget.” I’ve done the numbers, I did a

whole video on it: It shows you can kill every rich person in the United States and take all their moneyand take all the corporations and all the advertising for the Superbowl and I do this whole long gig thatcame from some statistics another man put together for me. I did it together and you can’t cover thebudget for one year, and then what do you do next year, right? So I said to Marc: “Listen. I support thepresident. Honestly, I don’t know how I could support the other side. I don’t know that I’m the guy tobe there, I don’t know if I’m a fan. Marc, you and I are so aligned in so much, but the way Simpson-Bowles was this close and he let it pass..” We had both sides willing to make some tough decisions.“..is beyond me! It lacks the leadership that fundamentally, the president of the United States - in mymind - has to have.” That’s my judgment; I’m just a person. But it’s like I don’t understand. Taking theeasy route is not something that’s gonna sustain or grow this economy, long term. And I said: “Usingthe political capital - even though I’m in support of healthcare - using that healthcare where half thecountry is upset about it, pushing it down their throat and trying to say it’s gonna cost less money.” It’sjust like, there’s certain things.. Marc says: “I agree.” Marc is the second largest fund-raiser..

Tim @ 44:18:[Laughs]

Tony @ 44:19:For the president! So I said: “How the hell are you raising all that money?” He goes: “Well, I feelstronger about him than the other guy.” And he said: “You and I are aligned with him on so many otherthings: the environment, people’s right to marriage regardless of sexual preference.” I said: “Of coursewe are!” So he said: “Come. Come and be there.” I said: “You know me, I’m totally respectful, but I’mhonest.” He goes: “Come. I’ll sit you right next to the president, we’ll have a great conversation.” So Iwent to this meeting and it was crazy. I’ve worked with so many presidents over the years, but I’d notgone with Obama. It’s downtown San Jose, they locked everybody in their buildings and literally, itlooked like one of those movies where everybody’s died and there’s nothing left but the buildings.

Tim @ 44:58:[Laughs] Tony @ 45:00:It was the wildest thing for several blocks. Took us in this room, there’s nobody else, there’s thesesixteen people, many of which you’d know from Silicon Valley. And I listened and the President camein and was really wonderful and he shared some comments. He said: “I’m not here to give a speech;you guys have built the biggest companies in the world.” Not me, I don’t fit that category, so I wasn’tgonna say anything. And he said: “But I really wanna hear from you guys.” So Marc turns to him andsays: “Are you ready for some real give and take, Mister President?” He says: “Yeah, okay: who wantsto go first?” And he (Benioff) points straight at me.

Tim @ 45:29:[Laughs] That’s what friends are for!

Tony @ 45:31:[Laughing] So I said: “Mister President.” I literally paused. I shouldn’t do this, I’m not here; they’ve allpaid a quarter of a million bucks to be here. Actually, I’d never done this before, I went: “(counting) Athousand and one, a thousand and two..” Tried to see if somebody else was gonna say something. Itwas really.. finally, I said: “Okay. Well, Mister President, I want you know I voted for you, I know you’rea man of tremendous integrity, I share the same values with you, I believe. But I’m really confusedabout two things. Number one: how you think you’ll be able to have a second four-year run and getanything done when you have taken the other side and demonized them to a point that they’re nevergonna work with you? And my second question - if I ever get one - would be “Why didn’t you supportSimpson-Bowles? It was right there; it needed to be done.”

A long pause, then he said: “Well, those are fair questions. First of all, I don’t think I’ve everdemonized the other party ever.” And I just sat there and I watched him say it and I was like “Are youkidding me? I’m not Republican, but come on! Both sides have demonized you.” And he goes: “Andthey’ve been really unfair to me..” And he went through this piece. And I said: “Mister President, that’shappened with every President, to be fair.”

Tim @ 46:42:Right.

Tony @ 46:44:That’s what they both do. And it’s gotten worse throughout the years, for sure. So I said: “What aboutSimpson-Bowles?” And he said: “Well, Tony, your hedge fund friends..”

Tim @ 46:56:[Laughs]

Tony @ 46:55:“They wouldn’t like it if we got rid of the 15% tax. Most Americans wouldn’t like it if we got rid of theirmortgage deduction and all those things. I’ve got a better plan.” And I said: “The better plan is you’regonna raise taxes back to Bush on the wealthy, it takes $4 billion a day to run this country. You knowas well as I do, the estimates of all that money in won’t even cover three months of this governmentspending. It won’t solve anything, you’re gonna have to raise taxes on everyone to cover this. So howdo you deal with that?” And he and I went back and forth.

Tim @ 47:30:[Laughs]

Tony @ 47:30:And to be fair, I’m telling my version of the story. I’m sure he’d give you a different version of the story.But there’s a point where I felt I was losing rapport with every person in this room, but I had to behonest! Finally at one point, a Secret Service man came over and grabbed my wrist and said: “I thinkthat’s enough.” I didn’t raise my voice, The President, to honor him, he said: “No. Tony’s created somecreative tension here, and I’m not used to that in these rooms. It’s a fair question.” I said: “I just wannaknow because I voted for you and a lot of people I know that voted for you, and I don’t know if they willagain, I don’t know if they need to - you’re gonna win anyway.”

Tim @ 48:02:Yeah.

Tony @ 48:03:“But I’d really love to know what to tell them about how you’re gonna govern with this level of division.”And at the end, I just said: “Thank you for your time.” And everybody else got up and asked questionslike: “Will you give a shoutout to the Jews?” Just like that. No hardball in there at all, but you know; itwas a political environment. Afterwards, I thought: “Oh my God, everybody’s gonna hate me!” Andthen Reid Hoffman walks up to me - you know, from Linkedin - and says: “I can’t belive you asked himthat question!”

Tim @ 48:26:[Laughs]

Tony @ 48:29:“I can’t believe you asked him that! I’ve been wanting to ask him that question forever! Good on you!”[laughing] People coming up to me.. The President came around and when he came back around,shaking everybody’s hand, shakes my hand. I shook his hand and grabbed him with both hands, Isaid: “Mister President, I’m not some stupid Republican who’s just looking for some tax break; thisweek, I fed a quarter of a million people in San Jose. I don’t live here: I came to do an event, this iswhat I do wherever I go. I came from nothing and I don’t forget where I’ve come from. I care as muchas you care, but I’m really concerned about your ability to get your agenda done in the next season ofyour career if you don’t find a way to bridge your communication style with these people. Intelligenceis not enough, you’ve got to build relationship.” And he stared at me, and he said: “How about you, mychief of staff, and you come visit me in the White House? You and I, one on one for an hour?” I waslike blown away. I thought: “I didn’t reach him at all?” It was mind-boggling. Marc was right there, hegoes: “That was unbelievable! I loved seeing that energy, that back and forth. You can really helphim!”

So then, um, about a week later, they were getting ready for these debates. And the other side hadcalled me and asked me if I would work with their particular candidate privately. And I’m not one-sided; I wanna see a debate that’s real. So I worked with Mister Romney, and that’s the first debatethey went in. He did pretty well. And my invitation was no longer extended!

Tim @ 49:51:[Laughs]

Tony @ 49:52:So I wouldn’t say: “punch in the mouth” but I would say “frustrated” because here’s a man who hassuch integrity, President of the United States, and I think a classic human being who cares deeply,smart as a whip. But it’s, you know, the failure to find a way to bridge compromise is both sides’sresponsibility. But in my mind as a citizen, I think the President of the United States has got to makethat happen. There are presidents that have done that, and there presidents that haven’t, and I thinkit’s not his fault that we’re at an impasse, politically, that is not allowing him to do the things that I thinkare necessary to put our house in order in this country. Easy for an outsider to see it, but as a citizen,we all have a right to our opinion. And so, I don’t know if I’d think “punch” but I’d say..

Tim @ 50:30:[Laughs]

Tony @ 50:28:“Shake him!”

Tim @ 50:32:Metaphorically.

Tony @ 50:32:It might be a better one.

Tim @ 50:33:Wow, that’s a hell of a story. I, uh, one last question and, uh I think people are really gonna enjoy thisand I can’t wait to to see the comments and the questions also. Uh, I have my moments of doubt;dark moments. I don’t know if you’ve had those moments of doubt..

Tony @ 50:50:

No. never.

Tim @ 50:52:Never? no little..

Tony @ 50:52:[Laughs] we’re human!

Tim @ 50:52:What do you do, uh, when you have those, those, those, those, dips? When you have those… thosedown moments and, uh, and doubts?

Tony @ 51:01:Those moments I’ve experienced primarily when I’ve found an inner conflict, uh, that’s hard to resolve.That’s been in the past when I’m travelling around the world. You know, I feel like I’m made to do whatI do as a human being. I’m certainly not the only human being that can help people but I’m able tohelp a lot of people. I’m filled with some privilege and it’s, uh, it’s a gift and something that’s earned,and something that is part of grace. And, um, and yet, the greatest thing in my life, outside of my workand my family, is my wife. Ironically, when I met her, she had extreme motion sickness since birth, andI spent almost a decade going everywhere ‘cause she would throw up on - we never wanted to beapart - and she would throw up on the flight up and the flight down. She literally lost - I don’t knowwhat it was - 19 pounds, which she couldn’t lose. She was a size zero. I took her to every typ ofphysician. I took her to every kind of natural healer, acupuncturist. I took her to NASA, to an expertthere. Nobody was able to help her. I took her to the guy who works with the Top Gun pilots; ‘cause ifthey use their vestibular system, you know, they’re dead. So I had this system and he was the onlyone who could help her like, maybe 10% of the time, not throw up.

But the process she did, this tightening in her body created a constriction in her lymph fluid and shedeveloped a tumor.

Tim @ 52:13:Oh.

Tony @ 52:14:And so the darkest days are, you know, what I think I’m made here to do is hurting the person I lovemost. Or I gotta be apart and, you know, corny as it sounds, I just, I just believed that there was alarger lesson that I needed to find a way to break through. We finally did, and she no longer… doesn’tlove motion, but she no longer throws up on any flight. And it was, ironically, an experience in India,which sounds so bogus to me, but I experienced it. She’s never thrown up since that time. It’s mind-boggling. It’s this man who’s.. he doesn’t - he’s not of any particular faith - it’s called Oneness. And,uh, he does this form of meditation where it basically primes your brain to a certain way of being andit balanced her body out: just amazing. But the point of the matter is I went through all this pain andall this questioning and all this doubt, but I kept asking: “What’s right? What’s real?” And I trusted mygut even when it was painful to trust my gut. And I found that that’s probably the most useful thing.

The other thing you gotta do is.. it sounds stupid. Hydrate your ass off. Make sure you rest, becausein a lowered state of energy, you’ll doubt everything. The worst thing that can happen, if you are whatI call “Energy-Rich” if you are physiologically at a peak, you can slam anything against you and you’llknow. Um, and so, that’s not to say you won’t have those downs but that’s what I try to do, to put mybody back in the strongest place. That’ll put your mind back there and your heart is always there. Andthen, ask what’s right and live there. And you’re gonna still make mistakes, and when you do, I think

it’s being- forgiving yourself and learning from it and moving the hell on to what’s next as quickly asyou can so that that experience allows you to help other people. And for me, the worst events I’veever gone through in my life have always been the best events ‘cause I figured: “If I’m experiencingthis, someone else is too, and if I figure it out, I can help millions of people.” And that’s given mesanity, so I’m not just dealing with my pain or bullshit or whatever the case may be, and that’s a bigpart of my life is ending suffering - which is impossible. But ending it in areas of people’s life ispossible. And, you know, it’s like what they always say, you know, it’s corny, you know? You know:“Suffering is optional.” Pain, Pain, you know.. everybody’s got a pain in their life. But suffering isoptional, and I really believe I can help people out. More importantly than to get out of the suffering isgiving an experience of more of the joy that’s already inside them. And I live to see that light in theireyes, and I’m gonna look forward to seeing it in you at some point, at an event, ‘cause you’ll have anexperience of it. And it won’t be this discussion. Discussion is wonderful; experience is ten timesbetter. I always tell people: “A belief is a poor substitute for an experience.” Right? You can believe allyou want about what you think something is, what investing is, or what China is like. Go to China, getthe experience, go to the event. Then you’ll know, and I’m a big guy, I put people in the experiencesas quick as i can and let their spirit and their heart and their soul kind of take over, and that’s what mylife’s about.

Tim @ 54:54:It’s a good mission; it’s an amazing mission. Uh, where can people learn more about the book, moreabout you? Where would you like them to visit you?

Tony @ 55:03:I’ll give you the address, but they can go to Tonyrobbins.com - that’s the easiest way - and, uh, thebook, again, is called “Money: Master the Game - The Seven Simple Steps to Financial Freedom”And, um, uh, what I’ll do is I’ll give you a site, and if people decide to do this and they go to Amazon. Ifthey send me their receipt, I will give them something I did for people during the pre-publicationperiod, which is: I made, uh, three videos that are kind of a fast track. So if somebody’s gonna like:“600 pages seems like a lot to me.” Well here’s, this’ll get you going. Um, I think for a lot of people, theaudio/video approach is a good approach to them and it’ll take ‘em deeper in the book. But I do wantyou to know that, um, most people - I don’t know if you’ve experienced this - most people read thebook are entertained because it isn’t just like some heavy factual piece, it takes you on a journey. Andit’s, uh, a journey through the financial world, which is wild; weird, crazy stuff is happening. It’s ajourney into the lives of people who started with nothing that are the wealthiest people in the world,how they did it. And it’s your own journey about where you’re gonna take yourself from this point onand how you wanna live that life and experiences that you wanna not only have for yourself, but whatyou really wanna give, and that’s the greatest thing. I look back and when you think about money:money is nothing but a tool that you either use for a life of service and a life, to increase the quality oflife for yourself and the people you love, or it’s used on you as a weapon. And I’m big on saying: “Timefor it to no longer be a weapon used against you.” And the only way to do that is educate yourself, andyou can do it in a way that’s really fun, and that’s what this is.

Tim @ 56:27:Oh, absolutely. So, guys, check out the book. Check out Tony. Tony, you’ve had a huge impact on mylife and just to the entertainment aspect of the book. Uh, I have tons of books sent to me, I mean,dozens a week, as I’m sure you do. Huge stack, uh, a lot of the questions that I asked did not requireme to read the book. And I ended up pushing off [Laughing] probably a half-dozen important projectsof mine because I got pulled into the book! And I remember: I e-mailed you, and I said: “You know, intwenty years, you still have it! Hot Damn! Like, I, that feeling, the sort of, uh, the Tony Robbinsresponse that I had reading your material back in high school.” And you e-mailed me, you were like:“High school? How old are you?”

Tony @ 57:05:[Laughs]

Tim @ 57:05:Uh, it’s a really fascinating read, and I know some of you listening are my friends who are deep in theworld of finance: you will find things, whether it’s in the interviews at the back, the profiles on the, youknow, uh, the top performers over the last several decades, or within. It’s a really fascinating rompwith lots of good stories. So, Tony, thank you so much for taking the time.

Tony @ 57:26:Thanks for coming down, great to meet you in person, finally.

Tim @ 57:29:Definitely; I hope it’s not the last!

Tony @ 57:30:[Laughs] It won’t be, brother.

Tim @ 57:31:Thanks!

Tony @ 57:31:Thank you!

Tim @ 57:34:Thank you for supporting the sponsors of this show; I’ve used them, I like them, and I think you willtoo. 99designs.com/Tim - It’s the world’s largest marketplace of graphic designers. You can see theprojects that I’ve put up, the competitions that I’ve spearheaded, including the book cover of the 4-Hour Body, and you can also get a $99 upgrade for free. So check it out at 99designs.com/Tim. Ofcourse, you can subscribe to this show on Itunes; you can also find every other episode in the shownotes, links from this episode at fourhourblog.com and just click on “Podcast.” There’s all sorts ofother cool stuff, including my interactions with people like Warren Buffett, Mike Shinoda of Linkin Park,the list goes on and on and on. And I would love your feedback; let me know what you thought of thisshow, who you’d like to hear on this show next, and any the thoughts, really. You can find me at Twitterat @Tferriss - that’s https://twitter.com/tferriss and on Facebook at facebook.com/timferriss until nexttime, thank you for listening.