Takeaways from Unshakable on Financial Freedom

Unshakable by Tony Robbins is a highly recommended book for investing. Tony Robbins explains the simple rules for investing safely and profitably. In this article, I will share my takeaways and lesson from this book.

My definition of financial freedom as a student is not to retire early but as of today, I define it as to not financially depend on my parent.

source: tenor

The Reality of Stock Market

In this book, I learnt that the market corrections and crashes are a normal and inevitable part of investing. Nobody can predict consistently on when the market will rise or fall.

Market Correction: 10% fall

Bear Market: 20% fall

1. Market corrections have occurred once a year on average since 1900.
2. About 1/5 of market corrections turn into a bear market. Bear markets happen every 3-5 years on average.

He mentioned that usually the correction last less than 2 months and 80% of them don't turn into bear market. The biggest mistake is to sell when the stocks are going down. Fear takes place and investors panic. The best move would be to buy as many stocks during the crash.

Prepare for the bear, but keep the prize in sight – The stock market always rebounds, regardless of the corrections and crashes we encounter.

source: quickmeme

Choose Index Funds

An Index fund is a collection of stocks or portfolio of shares. You are not picking individual stock but picking a group of them. It may be even cost lesser than an individual stock. For example, if you buy S&P500 index funds; a list of 500 biggest US companies like Amazon, Apple, Google etc, you are investing equally into all of them at the same time.

Why?

It provides reliable long-term growth with low fees. Index funds are great for beginners because they make investing more safe as if any of the big companies go out of business, you will not lose all of it. Looking at holding for a long term, it looks pretty positive.

Use index funds for the core of your portfolio and always have a financial cushion

source: makeameme

It's all about compound interest

The key to investing is being in a long-term game. Just like saving your money and putting them in the bank, its the same concept. Your savings account typically grow with compound interest which will generate interest every month and will accumulate overtime as the past interest starts to generate its own interest.

Through the concept of compound interest, Tony Robbins shared that $50,000 invested in 1985 in the S&P 500 would have grown to almost one million dollars by 2015.

source: makeameme

The Unshakeable Mind

The secret of living a fulfilling and extraordinary life is all in your head. Our mind is shaped by our decisions.

Tony Robbin shared that he follows The 90-Second Rule. When he starts suffering, he gives himself just 90 seconds to return to a beautiful state. He learnt to take slow deep breathe to step out of the situation and start focusing on things that he appreciates.

This shift in focus will allow you to see the good in every situation and become unshakeable.

source: memegenerator

Invest for the long term, trade less, lower your investment fees and transaction costs, be open to views that differ from your own, diversify globally, and control your fears during bear markets.

Feel free to share and recommend some good books in the comment!