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Feb. 23, 2024 - Stay Free - Russel Brand
26:38
Tony Robbins - How To Beat The Elites At Trading

I spoke with Tony Robbins about The Holy Grail of Investing and the ultimate strategies for financial freedom.Get Tony's book here: https://a.co/d/2lo6Veq--💙Support this channel directly here: https://bit.ly/RussellBrand-SupportWATCH me LIVE weekdays on Rumble: https://bit.ly/russellbrand-rumbleVisit the new merch store: https://bit.ly/Stay-Free-StoreFollow on social media:X: @rustyrocketsINSTAGRAM: @russellbrandFACEBOOK: @russellbrand

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And if there's any justice in the world of legacy media will soon be a New York Times bestseller.
But we are questioning the values of legacy media.
Tony, thanks for joining us today.
So good to see you, brother.
Nice to see you.
Tony, is this book about democratising the process of investing and making investing information that was previously clandestine accessible to ordinary investors so that we might take advantage of some of the principles that some of the wealthiest people in the world have been able to, up till now, exploit?
That's absolutely right.
I've been very frustrated.
I wrote a book right after the financial crisis.
I hadn't written a book in 20 years, but I was so angry and I know the people in the financial industry and saw the level of abuse.
And my question was, you know, is the game still winnable?
And so I decided to interview 50 at that time of the greatest investors in history that are alive today.
All people that started with nothing and became the best in the world at what they did.
They're all very different.
And I did this 674 page book.
I wanted something that my, anybody could pick up and start to develop that financial security and freedom
and more advanced people could do.
I wanted to hit both and we did.
I was really pleased with it.
Then I wrote a second book a few years later because I know when a crash comes,
people forget everything else you taught them.
And I knew the one would be coming, not because I'm so, you know, I have such great vision.
It's just every five years, roughly we have a bear market.
So I wrote "Unshakeable" and I thought I was done, but now it's a trilogy because so many people are behind.
We're in tough economic times, obviously, and people don't have a clear plan for their future.
And how are you gonna get there?
Well, the only way to get there is save more money and invest it or get bigger returns.
Well, bigger returns usually takes bigger risks.
Bigger risks can lead to you not having anything, or a lot less than you need.
And so I was working with Ray Dalio, one of the greatest investors in history.
He's become a good friend over the last decade.
And I asked him one day, out of all the things you've taught me, he's got so many principles, This is a man who manages $170 billion in assets for countries, for pension funds.
I said, what's the single most important investment principle you could give me?
And he said, Tony, I struggled with that for the last decade.
And he said, I've made it into a mathematical principle that's so simple, I call it the Holy Grail of investing, which is the title of the book.
It comes from Ray.
Listen, what is it?
He goes, everyone knows if you want bigger returns, you got to take bigger risks.
And the only thing that can help you is diversification.
Everybody knows diversification.
He said, but what they fail to teach you that I figured out is if you can find 8 to 12 investments that are non-correlated, Now, for your audience, I'm sure many of them know, but in case they don't, when things are correlated, it means they tend to move in the same direction.
If they move up, they both move up.
If they move down, they both come down.
If they're not correlated, they go in opposite directions.
So, stocks and bonds typically would go in opposite directions.
People have their bonds, so if stocks go down, their bonds kind of save them.
The only problem is in 2022 and 2008, both of them went down.
And so, without going through a technical analysis, he figured out this formula.
Well, it sounds good.
But it's hard to find these uncorrelated investments when you're just looking at stocks and bonds around the world.
And there's a lot fewer stocks today and a lot more correlated around the world.
And so I started looking around and trying to find the answers, and I was at a JPMorgan conference where they do it once a year.
It's an alternative investment conference.
You have to be a billionaire to attend.
I was a speaker, so I got to go.
And Ray was right before me, and he spoke, and all these billionaires had not taken notes the whole time.
Somebody asked him a similar question.
He said this formula, and every head in the room went and wrote it down.
So I was like, okay, how do I crack this code?
Well, the only way you can do it is by getting involved with alternative investments.
And this is the problem.
The greatest returns in the world have been kept away from the average public.
In America and around the world, especially if you do business in America, people can invest in companies here.
You have a limitation.
You have to be a certain type of investor.
You have to have a million dollar net worth as a minimum, not counting your house.
And you have to make or make $200,000 or $300,000 a year.
Well, a lot of people inherited their money.
They're not sophisticated or they built a business.
They don't know about investing.
And so Congress now finally agreed with me because this is so unfair.
And the House passed a law that says you can now take a test.
You study, take a test, and then you can tap into these.
Now, what does that mean?
Let me just give it to you real quick.
I interviewed 13 of the most successful investors in the world in this category of alternative investments, private equity, private credit, private real estate.
And these are people that manage 20 to 100 billion dollar funds and this is what's crazy.
They're trying to get to your goals.
These guys are getting 20 to 30 percent compounded returns every year for decades.
Now most the average person think that's impossible and the reason is for decades that money has gone to big pension funds To the big banking institutions and to the ultra wealthy.
And so now that it could be a way for people to legally start to invest, even if they're not in that category, the second problem you've got is getting in.
And since I have a good name and brand and know a lot of people, I've been able to get little pieces of some of these funds.
But what happened was I was lamenting one day to a dear friend of mine who's worked
with Paul Tudor Jones, a really brilliant financial guy.
And I was saying, you know, I get these little pieces.
It's like, you know, trying to get into the right club.
And you know, if you don't know the right people even if you got the money, you're on the other side
of the velvet rope, you're not getting in.
And I said, I've got little pieces, but this is frustrating.
And he said, Tony, I'm gonna tell you what I do with most of my money.
And this is a really brilliant guy.
So I'm leaning in and he said, I said, well, what do you do?
He goes, there's this firm in Houston, Texas.
I said, not London, not New York, not Singapore, Houston?
He goes, yes, they're outside the bubble.
Instead of trying to fight to get a little piece of one of these funds, he said, they've spent billions of dollars and they bought into the funds and you can buy a piece of the actual corporations.
Now, I'll shut up after this because I've done a long rant on this, but here's what I want you to understand.
If you look at the Forbes 400, the richest people in the world, And I asked you, Russell, what industry do you think is the most billionaires?
What would you say?
Probably tech.
That's what I thought, too.
It's not tech.
What would you be a second guess?
Energy.
Energy would be a great guess.
It's not.
But it's actually financial services, and it's not hedge funds, because they go up and down.
It's private equity.
And the reason, Russell, is they tie your money up for five years, some of them ten years, and people agree to it, and they get 2% on your money, whether they make you money or not, and 20% of your upside.
And the only reason people do that, of course, is because they're getting returns that are ridiculous.
Like, here's an example.
If most people in their 401k in the U.S.
or in other countries, they'll invest, let's say, in the S&P 500, the famous index.
It's the top 500 companies in the New York Stock Exchange.
For the last 35 years, that's brought a return of 9.2%.
Well, why does that matter?
It means you double your money every eight years, doing nothing.
It's pretty cool.
But if you put your money not with these people, not the people that I interviewed for this book, who are the 20 and 30 percenters.
Average private equity has been 14.2%.
I'm throwing a lot of numbers, but that means you're making 50% more per year compounded.
So if you put $100,000 out of like your 401k or whatever years ago in the S&P 500 and forgot about it, it's worth $2.6 million today.
It's pretty amazing.
But if you took the same $100,000 and put it in private equity, it's worth $13.9 million.
So that's what's now available for people.
And instead of paying these big fees of 2 and 20, You can actually be a partner in all of the things they own, and get the 2 and 20 yourself.
That's why I'm so passionate about this.
And then also, we're giving all the rights to this book, all the profits to this book, is Feeding America.
I think you know we've provided, I've provided over a billion meals over the last eight years through them, through both all my books I've done this with, and also obviously additional contributions.
So, when people are learning to change their own life, they can help other people that are in deep need as well.
It's important that the ultimate goals of this passionate endeavor are plainly philanthropic and not in the way that we've come to understand the word philanthropy in recent years as a mask for Bill Gates's globalist agenda, but truly putting food in the mouths of hungry people.
That's extraordinary.
I've got so many questions, Tony, and like I work often for myself and I know for many people in my audience it will sound like you're speaking in another language and I know that you, like me, don't come from a class of people that necessarily understand that language indigenously.
Just before our conversation commenced I was watching Rishi Sunak, the current British Prime Minister, former Chancellor of the Exchequer and member, hedge fund member, talk about how he was doing such a great job and showing us with like a drawing on a whiteboard why people aren't poor and suffering and why inflation is coming down.
Although, you know, which seems to be at odds with many people's visceral experiences, many of the costs of living appear to be increasing.
And it seems important to me that he was part of a hedge fund invested in Moderna just before the pandemic crisis.
I'm not suggesting anything malfeasant, of course, simply the kind of luck that seems to prevail in those circles.
Indeed, The type of luck that Nancy Pelosi and her husband Paul Pelosi have become global masterminds in.
It's already sort of commonly understood that if you were to just invest in what Nancy Pelosi invests in, you'd be beating some of the world's best hedge funds.
But you're saying that now, through democratising these techniques, we don't have to simply make Nancy Pelosi our spirit guide.
We can ourselves invest in a way that will provide us with a great return.
One of my questions, Tony, is if you are democratising these principles and making them accessible to a wide number of people, won't that in itself influence financial outcomes and diversify the number of people and somehow dilute the impact?
Or is that a rookie error I'm making?
No, it's not a rookie error.
It's a good question.
No, it's really, first of all, Trudeau did the same thing, by the way.
He made those investments right before he enforced those actions.
It's just unbelievable when you look around the world how lucky people are.
They're very lucky.
Very lucky.
But no, the reason is, you know, it's interesting.
Part of what the challenge is and why things get overvalued is because for years we've had these artificially low interest rates.
And so the only place to put your money was in the stock market, which is risky.
But so more and more money chasing the same small number of stocks.
So that's what inflation is.
And so we used to have 8,000 stocks, for example, here in New York.
Now you got 3,700.
And the same number of people going after them and saying, "Well, there's no other place to go."
Well, now bonds are giving a decent return.
So some more money is going there.
But to give you perspective, think 3,700 options versus in the US,
there's 250,000 companies that are over 100 million to 3 billion.
87% of all companies are not public.
So what private equity does is they know a category.
I'll give you an example.
There's a gentleman named Robert Smith of Vista.
He starts with nothing.
He's an incredible human being.
He's rated one of the top 50 business minds of this century.
Started with nothing, built this $100 billion fund, and I can't tell you the exact number because you have to have his prospectus, but let me just make it clear.
It's way more than 20% compounded here for 26 straight years.
So if, give you a sense, if 5% is going to give you 14 years to double, or 9% is going to take 8 years to double, when you get 20% it only takes you 3.5 years to double your money.
You can really grow something with a very small amount of money with compounding in that area.
Now this guy, he's taken one category, software as a service.
And so he knows everything about those kinds of companies.
He's been doing it for 26 years.
He can take a company, figure out how they should change the company.
Do they need new leadership?
What kind of technology will do it?
How can they cut the cost?
He builds the company up and then he sells it to a larger company or takes it public.
That's the format.
So there's so much more in private equity.
It's not going to be diluted.
And that's the beauty right now.
My hope is it'll get into people's 401ks, it'll be available where people can accelerate their returns, because that's what pension funds and the wealthiest people in the world have done.
When people look at where they put their money, the ultra-wealthy, on average, the latest report shows they have 46% of their money in private alternatives, in private equity, private credit, and only 29% in the public stock markets, and across the world.
For 35 years, every stock market in the world has been less than private equity in that same country, to give you perspective.
So this is what the rich have had access to, and now people can not only get into those funds, because it's one thing to legally get in, but to now be a partner side-by-side with them is one of the most exciting things that I've seen.
And it's not only just private equity, it's also private credit.
I was just reading an article today that just came out in the Wall Street Journal, it was talking about private credit as the new explosion.
I'm sure you know, banks since 2008 have gotten tighter and tighter.
And now, you know, some of the regional banks here in the United States, I'm sure you heard about Silicon Valley and so forth, that have had their problems.
Well, now, banks, excuse me, all these companies, these 250,000 companies I told you about, that are 100 million to 3 billion plus, They have a hard time getting financing.
And so what's happened now is the private equity guys have huge sums of money.
They know how to value companies properly and they loan money to these people and they do it really judiciously.
They have less than a 1% failure rate.
So let me give an example that maybe your audience can understand.
If you're Be invested in bonds.
A bond is just an agreement.
It's an IOU.
I'm giving you money, you're promising to give me my money back, plus 5%, 4%, 3%, whatever it is, right?
Well, bonds have such low returns that two years ago, people were buying junk bonds.
They call them high-yield bonds, super risky bonds, to simply get a 3.9% return.
Well, we were getting 9% in private credit at that time.
So private credit, these people have less than a 1% failure rate.
Any bank would die for that.
And they're producing returns right now of 11 and 12%.
You know, if you have a mortgage and it was locked at 3%, you're happy right now.
But, you know, with interest rates rising, if you didn't lock it down, you're paying two and a half or three times more money for the same house.
Well, that's called a floating rate.
Well, the floating rates on banks, excuse me, on private equity loans or private credit loans, they float.
So things that were 5% or 6% are now 10% and 12%, and there's no more risk than there was before.
And those are the types of returns people typically get from equity, from investing
in the stock market if it goes well.
So there's some really interesting opportunities happening.
There's opportunities to actually, believe it or not, to own sports teams, which no one
but multi-billionaires could do before.
So in a way, what you're saying that this book, the Holy Grail, your newest book, number
one on Amazon, affords the opportunity for small investors to invest in a way that was
was previously not only impossible, but actually illegal.
And it's more likely to give higher yields than other forms of investment.
So because when you're describing this to me, it does seem like an esoteric and inaccessible world that's almost designed To keep people outside of it.
And in fact, that's why I think since 2008 in particular, has been increasing the idea that there, you know, of course, that during the pandemic, there was a massive wealth transfer.
And it seems like the momentum of finance, global finance, and indeed power, is travelling in exactly the opposite direction to the one you appear to intend in this book, towards a concentration of wealth.
A concentration of power.
A concentration of authority.
But what you are saying is, is that opportunities exist for people that are investing much smaller sums of money.
We're talking about ordinary people, I guess, to get significant returns.
And this is something that even I would understand.
Is that right, Tony?
That's really true, and a way of explaining it is, when I wrote my first book, I basically interviewed 50 of the smartest financial people in the world, the Ray Dalios, the Carl Icahns, the Warren Buffets, all of them, all different, but they agreed on four things that I think anybody can get their hand around.
They said, what do they do?
Some of them are trying to buy things at the cheapest price, when everybody's afraid.
Some of them are trying to study and anticipate world markets.
They all have different strategies, but they agreed on four things.
First one's pretty simple.
They all focus on not losing money, where the average investor focuses on making money.
And you say, well, that's because they're rich.
No, it's because they know if they lose 50% on a stock, they have to make 100% to get even.
And it's very hard to get 100%.
It could take years.
So they're really judicious.
If you listen to Warren Buffett, he says, here's the rules to investing.
Rule one, don't lose money.
Rule two, see rule one.
Well, that sounds nice, but how the hell do you do it?
Well, the way they do it is the second key.
They have what's called asset allocation.
It's a big word.
It just means if you had a thousand dollars to invest or a million dollars, the most important decision you're going to make is not whether you put in an apple or whether you buy this piece of real estate.
It's going to be your philosophy of investing, meaning how much of that money, what percentage of that thousand dollars, a million dollars, would I put in an environment that is less risky And it's less risky, it's going to get less rewards, but it's going to, it's kind of like the turtle and the hare.
It's going to grow well over time and compound, but it's not going to blow my mind, but it's going to get me there without losses.
Where do I put the balance is in areas that are a little more risky.
It might be my real estate or it might be stocks or something else that has a lot of upside, but you could also lose all of it.
And so the balance of that is really related to how old are you?
When do you need the money?
If you need it 30 years in the future, you can put a lot more at risk because you have time to make up for it, because compounding will take care of you.
If you're 60 years old and you need it in four years, you're probably going to have to put more in the security bucket, so to speak.
So they have ways of managing it, so they don't ever put everything in one place.
They don't ever lose.
But the third thing they teach is the most interesting, and this is what they get in these types of investments I'm describing as alternative investments.
It's called asymmetrical risk-reward.
They've got all these words.
Lawyers have words that give them power, because you don't know the words, right?
Medical doctors have words.
Iatrogenic.
It's iatrogenic causes.
Iatrogenic causes are the fifth biggest cause of death in America, and that means physician-induced or hospital-induced, to give you an idea.
So we have certain words.
Put the words aside.
Asymmetrical risk-reward simply means this.
Most people think these billionaires got rich by taking giant risks, and that is not true.
A few may, but they don't usually stay a billionaire.
They do it because they look for worth the least amount of risk with the most amount of upside.
And so, for example, I work with Paul Tudor Jones, one of the greatest investors in history, and he, you know, in 1987 when the stock market had its biggest drop in history percentage-wise, 20%, he made 100% for his clients.
He's that smart.
And Paul Tudor, when he got into trouble and I had to come turn him around, and I discovered he originally would never make an investment unless he thought investing a dollar would make him five.
Now watch this.
If he's wrong, he can invest another dollar and make four.
He could be wrong four times out of five and he makes money.
That's called asymmetrical risk reward.
Or another example is I have a friend in Texas who during 2008, the worst economic time, He took $30 million and converted it into $2 billion in one year.
And this is in 2008, the worst economy.
How?
He saw real estate.
Everyone thought it couldn't go down.
He bet against it with some special techniques.
But what made him successful is he could have been wrong 13 times and still made money.
He wasn't wrong 13 times.
I asked him one time, how would I explain asymmetrical risk-reward to someone like a young child or my teenage friends?
And he said, Tony, I was struggling with that with my own kids.
I came up with an answer, and here's what it is.
He said, I look for an investment where I could literally not lose money and have upside immediately.
And my response, most investors would go, that's impossible.
He goes, no, nickels.
He said, if you buy a nickel, it's never worth less than a nickel.
And he said, and guess what?
It's worth 30% more valuable because, unfortunately, with the U.S.
government, the cost of nickel is 7.8 cents, almost 8 cents.
And he said, that's just the silver value of nickel value in there.
It's actually 9 cents to make.
These were copper in pennies.
They took it out, and all those pennies were worth twice as much.
He said, so the day I buy it, I can't lose money, and I'm 30% up.
I said, but you can't melt the money.
He goes, well, you can, but he goes, I don't need to.
They're going to change the nickels, and when they do, it'll be a doubling or tripling.
He goes, if I could push a button and convert all my money to nickels, I'd do it tomorrow.
And so his kids, and he called the Fed and he bought $20 million worth of nickels to show them how this is done.
The last one I'll give you real quick is from your part of the world, if you look over at Sir Richard Branson, you know, when he decided to compete, you know, with British Airlines, his biggest risk is going to buy all these planes.
So he negotiated for a year and a half, like, He'll risk his life, but he doesn't do it in investing.
If you know Richard, he's like, what's the downside?
How do I protect the downside?
So he negotiated with Boeing for a year and finally got them to agree that if he didn't make it in a year and a half, he could give back all the planes and there'd be no loss to his credit and no loss to his money.
So there's no downside.
And then the last key is they all diversify.
So all of these tools in this book show you how to do that and show you how to do it with small amounts of money if you want to.
But I just want to mention one more, the sports teams.
You know, today, sports, 100 out of the 90, 92 out of the last 100 TV shows that were the top TV shows in my country were sports.
Because everyone's cutting cords.
They're binging.
You can't binge on sports.
You got to watch it live.
So, you know, our football, which, you know, we call your soccer, what you guys call football, our version of football, we paid $110 million at Peacock to show one show, one program, And it was worth it.
They got 20 million new subscribers to watch this particular show between Kansas City Chiefs and the Dolphins.
You can own a piece, just like buying a piece of IBM, but these sports teams grow at 18% a year compounded.
It's ridiculous and it's not tied to the stock market.
So the stock market goes up and down, you don't care.
These sports teams continue to grow.
Michael Jordan bought his Hornets team for $275 million, just sold it for $3 billion 11 years later.
And that's typical these days.
So you can get a piece of that today, of the fun of sports, of the monopoly power they have, because no one can compete with them in that city, and be able to grow because they're really media operations now.
They're not just butts in seats.
All this is available to the average investor if they do a little homework and educate themselves.
How do you continue to engage with your purpose?
How is it that you retain this passion after all of these years of doing what you have done with all of this success?
How have you drilled yourself to pay such attention to detail?
And what values is it that you're appealing to in yourself as you continue to create this kind of content and offer these kind of opportunities?
What is it, Tony?
I don't think it's because I'm such a great person.
I'd like to believe that.
But I suffered so much in my childhood, both financially and emotionally, that I've got to find a way to solve this so my future family doesn't.
Now I provide 100 million meals a year to give you an idea.
I had a billion goal to do in 10 years.
We've done it in 8 years.
I'm now working on a 100 billion meal piece.
I'm looking for 99 other people to do what I did.
100 million meals a year for 10 years because of the Ukraine war.
You know, that's the breadbasket, as I'm sure you know.
And because the WF doesn't want us to use fertilizer, but 50% of the world's food comes from fertilizer, most from Russia, so the cost has gone through the roof.
So normally, 80 million people are at threat of starving.
This year, it's 380 million people.
So I've actually, in the last year, we've gotten to 60 billion.
But the answer to your question is, I love to see people, I hate suffering, and I love to see people light up.
And it's just, I'm addicted to that.
When I was a young man, I figured out how to lose weight.
Literally, I was 5'1 in high school, 1.5 meters, I'm now almost 2 meters, you know, 6'7, and I tell people the difference is personal growth, of course, right?
But that explosion in my life during that time period, I learned how to lose weight, and I helped my friends, and I got all this love from it, you know?
And I think I got addicted to having the answers around finance, around your body, around your emotions, around your relationships, around how to grow in your career, and so I've been obsessing on that for This is my 47th year.
I started when I was three, of course.
So, of course, I'm still driven by it.
It's so fulfilling, Russell.
Same reason you do.
I mean, I love your passion and your willingness to go out there and put yourself on the line.
Plus, your ability to just make people laugh about shit that would normally overwhelm people completely.
So, I'm grateful for your messages, brother.
Thank you very much, Tony.
Well, I'm taking a radical departure from my previous career trajectory.
It's investment now that interests me.
I'll be spending all of my time looking for unique financial opportunities.
If we can get ahead of even the Pelosi's with this simple Holy Grail technique, then I'm up If we can get ahead of the globalists like Trudeau and Rishi Sunak, then it's certainly the book for me.
Tony, thank you for making time for us today and for explaining so eloquently and yet simply these complex ideas.
I'm going to read your book.
I appreciate your time.
Thank you.
Thank you so much.
Blessings to you.
I love you, Tony.
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