Do THIS To SURVIVE A Market CRASH & Protect Your MONEY | Tony Robbins & Lewis Howes

I don't care how well prepared you are. That's a scary thing.

Yeah.

But it is the greatest opportunity in your lifetime to go from wherever you are financially to where you want to be. I hope your audience is listening right now. Hear me. The goal. If you own a business, and I would assume a lot of your viewers are business owners or getting started in business, no matter how good you are in business, think about this. The one universal rule that every idiots in finance know is diversification. It's the only free lunch. You've got to diversify. Because if you put all your eggs in one basket, no matter how good the basket is, one day, that real estate market, that stock market, that bond market, that collectibles market, whatever you invest in, Ray Daliotz showed me, Statistically, it'll drop 50 to 70% on a day. Now, if you're later in life when that happens, it's over for you. So you have to diversify. And yet most people, they know real estate, so they do it. Or they know stocks, they do it. Or they grew up with their hand, their parents flipping things, and it's the wrong thing to do. So you've got to diversify in order for you to be able to truly succeed. And that's why when you own a business, if you put all your money in your business, which is what most of us do, naturally, a lot of risk. You put all your eggs in one basket. And there's things that can happen. I mean, you know, you're. Let's say you spent 20 years and you figured out how to put together the ultimate map, you know, and you remember Garmin came out with this thing called the Tom Tom. I don't know if you remember, you used to put on your. Are you old enough to remember that you used to put on your phone or you just put on your D. Cost 100 bucks. It was a breakthrough.

They were making like 100 million or something.

They were, yeah.

Yeah.

Six months later, what happened? The iPhone came out with Google Maps. These little bastards, my French came out with it, put Google Maps, put their own map on here. And cost how much? Zero. What's that gonna do to your business when someone takes your product or serve and gives away for free? So I always tell people, competition happens, technology happens. What you must do is have a second business with no moving parts, no people, no time. Maybe it takes you two, three days a year for two or three hours. After you've read the book, you put it in place and you measure it two or three times a Year. That's it. Go on with your life now. If there's a trouble in your business, you're financially set I in my life. At 31 companies now, we have, you know, what do we have? 1200 employees, seven different industries. We do 5 billion in sales. I mean, that used to be, you know, me and my seminar business, it's grown geometrically. But with all those moving parts, the only way I've been able to succeed is because I've taken every one of those businesses and I've diversified my assets so that when things were in trouble, I still have enough economics to take care of myself and keep the business going. So everybody needs to create a money machine that works while you sleep, that doesn't have moving parts. And that's what this is really about.

You have a great cartoon in the book where there's a kid asking his father something about, like, how do you invest your money? Or how's the stock market work? And he says, you put your money in at the peak, it starts to go down and lose money. And so you get scared and you take it out, and then someone smarter than you makes all the money. Something like that. So how do we. And I've done that in the past where I put my money in somewhere high. It went down, and I was like, oh, I just lost a bunch of money. Let me take it out. And then I put it back in another time, and I'm like, what am I doing? So how do we invest without fear of, oh, it's going down, I need to take it out, or, like, trying to time it. How do we do that?

Great question. It's one of the main reasons I wrote the book. I always tell people, if you just read the second chapter of the book and nothing else, it'll change your life. You can do that with multiple chapters, but that chapter is really about teaching people that winter is coming. We all know winter's coming, to coin a phrase, but that winter is the best time on earth. And I know that's counterintuitive, and I don't mean, like, being a positive thinker. I mean pure facts. So in the book, I take you through 10 facts. I'll give you a couple of them right now. The first fact I give people is, why do people not invest? They're afraid of failing. They. If you're a millennial. Right, so you grew up witnessing 2008 when you were still relatively young. How old are you now? 33. Okay, so you were what, 27.

2008. Yeah, 27.

I guess. Yeah. 27, 28 years old. So you're a young man and you're watching the world melting down in front of you. For most millennials, they are the first generation since the generation that went through the Depression that is not investing at the ratio they need to even close.

And they have more debt than everyone, probably right? With all the.

They have more college debt than everyone. Absolutely true.

I have a friend that has $400,000 in debt, dental school.

President Obama just paid off his debt five years ago while he was still president, I swear to God. Oh, my. And he had a bunch of scholarships for the last bit. It took him that long. So what I tell them is, listen, paying off your debt's not enough. You've got to become an owner or you're always going to be in that place. So, yes, pay off your debt. But here's what you need to know. You got to become an owner, you got to get in the game, but you got to understand the rules of the game. You don't know the rules of the game. The old phrase is when a person with experience meets a person with money. We know the phrase, the person with money ends up with experience, experience ends up with your money. Right? So I teach people the rules of the game so they don't get screwed. But the most important thing is this winter's coming, but people react. So let's take last year. Last January 2016, we had the worst stock market opening in the history of the stock market. Worst. First, I think it was 10 days. There was a drop of $2.3 trillion with a T. Crazy. Everybody's freaking, thinking, the bear market's here, the market's over, the crash is here. I think the market dropped 800 points one day. And on that day, all the richest people in the world were in Davos, Switzerland, for the big conference that they do every year. And they went there. MSNBC went there, and everybody's freaking, what's happened? What are we going to do? And they said, let's go ask Ray Dalio. Now, your listeners may or may not know Ray Dalio as if you're not in the financial business. You've probably never heard of him. You've probably heard of Warren Buffett, but Ray Dalio's done more. You had to have a $5 billion net worth and $100 million to give him or he wouldn't talk to you 10 years ago. Now, he doesn't give a shit how much money you have. He won't talk to you because he's got a Closed fund. But they go and they put Dalio on television. Cnbc. He's the king. What do we do? And he says, well, you don't need to panic. Corrections happen all the time. But you need a strategy that when markets go up and down, you don't go up and down. And he said, I spent 15 years of my life to perfect such a strategy. All of my money's in that plan. And he said, it's called All Seasons. And I've never revealed it before, but I gave it to Tony Robbins. He extracted from me. And it's his book. So you ought to go read his book. This is what he says on national television. The data markets are crashing. And that day, to give you an idea, which is the beginning of February, I think it was nine days into February, the market was down 9% in the first five weeks of the year. His strategy, which he gave me, which is made money 85% of the time for the last 75 years, it's averaged a 10% return just under. And the average loss when it 15% loss was 1.6. So if you go to Vegas and you could spend 85% of time, make money, and when you made money, it was 10%, your loss is 1.6, you go forever. His plan made 2% while the market was down 9%. So it was up 11% difference. Now, I'm not suggesting that's the only strategy to do. There's many. His is the smoothest ride with the least risk. But what it did was combination of that. And then right after that, I interviewed Fed chair Alan Greenspan. He was the head of our economy, the most powerful man in finance for 19 years, four presidents. He was there, ran it. I was just with President Clinton this last week. He was the Fed chair for him. And I interviewed him for like two hours or three hours off stage, two hours in front. And I asked him in the very beginning of this thing, I said to him, I said, look, if you could be put the Fed today, what would you do? And he looks at me and as I said, he leans forward and he says, resign. So I look at that and go, oh my God, I need to write a book that will free people. So here's what will free you. Everyone's afraid of the crash. So here's what you need to know. Two terms you should understand. Correction versus crash. Anytime the market drops from its high by 10% or more up to 20, it's called a correction. If it drops 20% or more up to 80%, like the great Depression, then it's called a crash or called a bear market. Okay, so how often does a correction happen? How often do we have to be prepared for it? Since 1900, we've had a correction on average every year for 116 years. So when is winter coming? This year, on average, how often does winter come? You wouldn't be surprised if it stormed and rained. Now, some winters are long, some are short, some are harsh, some are light, but winter always comes. So I wasn't panicked when this happened last year. I'm not panicked whenever it happens because I know it's supposed to be. How long does it last? Average 56 days. Okay, so just under two months. What's the average drop during that time? 14% over the last 30 years. 13.5 of the last hundred years. So I use the more recent one. 14% get your attention, right? 14%. You get a little gut check.

Yeah.

But here's. You need to know. 80% of all corrections never become a bear market. 80%. So all this fear and what people do is what you said you did is they see it. It's freaking out and losing money. I'm the hell out of here. And they get out. The stock market never took a dime from anybody. Only you can take it from you. You sold. That's why you lost.

Right?

Right. So if you look back and say, what was it like in 2008? I can remember vividly being with my platinum partners and saying, you see these $80 stocks? This is six months before the crash. I told them in April, I brought them to Dubai and I said, these stocks are going to go to 8, and some are going to go to a buck. And by October, and I told them what to do, so they were able to get out October. I go on the Today show in October of 2008, and they go, Tony, there's been $3 trillion meltdown. Pump the country up. You got four minutes. Ready, go. That's not what I do, first of all. And I said, I'd be alive. I'm not going to Bobo. At that point, the $80 stocks were 8. I said some of those. I said, I'm not a market forecaster, but I work with Paul Tudor Jones, one of the greatest investors in the history of the world. In the biggest market crash in history, 1987, he made 200% when everybody else was losing their entire life. I've been coaching him continuously now for 24 years, every single day. So I said, I work with the best in the world. And they're telling me Based on history in the 30s and history in the 70s, this $8 stock, some are going to be a buck. And I remember the day In March of 2009, Citibank, which had been, I think $70, sold for 97 cents. You could go and take your money out of the atm. It cost you more to take your money out than to own the bank, right? And then I told people it'll jump from 99 cents to 6, 10, $12 in a month or two. And it's exactly what it did, right? So what you got to know is corrections happen every year. You got another couple months. Got to know it's 14% and you won't lose because 80% of time doesn't go to a bear. Now, what about the bear? The bear market, it happens to give you an idea. In the last hundred years, every three to five years, you've gone eight without one. We're way overdue in modern years, last 30 years, it's about every five years. The average length of a bear is one year. The average drop is 33%. A third of those drops go 40% or above that. I don't care how well prepared you are, that's a scary thing. But it is the greatest opportunity in your lifetime to go from wherever you are financially to where you want to be. I hope your audience is listening right now. Hear me. If you want to leapfrog and you're a millennial and you think there's no future, or you're a baby boomer and you think you're too old and it's too late, the greatest gift you have is coming. It doesn't sound like it. This is not positive thinking. Bullshit. This is the truth. Wall street, the stock market, is the only place that when things go on sale, people freak out. If I said you like Ferraris, sure. If I said to you, Ferraris go on sale for 50% off, awesome. But when I tell you Apple's on sale for 50% off, you go, oh, what am I gonna do here? What's wrong? The whole world's coming to an end. If you think about it, how old are you? 33. 33. So let's assume if you were 35 and you lived 85, you got 50, 52 years ahead of you. That means you have 52 more corrections to live through. That means you're probably in those 50 years gonna have 10 more bear markets to live through. If you're gonna have a gut checks every time or you're gonna leave out of it. If you didn't participate because you thought, oh, the market's too volatile. I can't trust it. All that stuff. You missed 250% return in the last eight years. I mean, you've missed out on everything while you're waiting for things to be better. And if you won't do it when it's like this, when it crashes, you're not going to get in. So here's the good news about the bear, good news about the bear average once a year could be longer, but that's. The average could be shorter. But here's what's cool. Every single bear market in the history of the United States has led to a bull market, meaning right afterwards. So 2008, this plummeting, what happened in 2009, up 67% in a year. I can show you every single bear market. And the next year when it comes out, it's this explosion. Now that's not true in every market in the world. It's true for two centuries in the United States. So that's why Warren Buffet says, I want to be greedy when people are afraid, and I want to be afraid when people are greedy. If you remember 2008, he was telling everybody, buy he was having the time of his life. Buy, buy, buy. Everything's on sale. So what you have to do to become unshakable is turn. The metaphor I use is turn the snake into the rope. Meaning we all know the story. It's the middle of the night. You're walking through the yard or someplace and you see a snake and you're freaked out. You pull back, come in the morning, and it's a rope. Once you know it's a rope, you're never afraid again. I want to take for people investing and show them how to turn that snake into the rope. It really is. And I'll tell you one final stat on all this. People always say, and you start to bring it up, timing. How do I time it? Like right now, things are too expensive. Oh, wait, people have been saying that for eight years. Is there going to be a correction? Yes. But when it corrects, you want to invest again, you'll get dollar cost averaging. If you paid a little too much here, you'll pay less here. It'll bring the average price to a reasonable place. It's going to allow you to succeed. But here's what people need to know about timing. If you are not in the market, it's the most dangerous thing. This is so counterintuitive. So I hope your audience is listening. Let me show you there's two different research projects. One was done by JP Morgan. I just spoke for them the other day at their alternative Investments conference. And to be in the room, there are 400. You have to have a billion dollar net worth to get in the room. Crazy. It was mind boggling. Right. So J.P. morgan did a study and also Schwab did a separate study, 20 year studies in the last 20 years. To give you an idea, the average S&P 500, that index has produced 8.2% over 30 years. It was 10.28 in the last 20 years. A little bit less still. Great. You double your money roughly. You're in a position where you double the money a little more than every, you know, what is it now? 7.2. So be like a little more than 10 years. But here's what they found out. If you miss the 10 best trading days in 20 years because you're trying to time the market and you're not in it, during one of those days, you went from 8.2% return over that period per annum per year, it dropped down almost half, 4.5. What are the chances of you knowing the past 10 days to trade in 20 years? None. Yeah, right. Warren Buffett said market timers and market forecasters are only there to make fortune tellers look good because no one can do it successfully. Even if they do it for a while, it doesn't last. It's luck. Jack Bogle told me, started Vanguard $3 trillion company. He said, we took gorillas a thousand in a room and had him flip coins. And we said, how many times he got heads, how many got tails? Just gorillas flipping them randomly. And he said, one gorilla in that set of, of those turns flipped heads 21 times in a row. Now when you look at that and see all these gorillas doing it, you look out and say, what a lucky gorilla. He said, but in the hedge fund industry, in the mutual fund industry, when somebody does 10 in a row, you go, what a brilliant investor. Right. What a genius. And it's just, it's just averages and luck at that time.

Yeah.

In fact, he showed me that 96% of all mutual funds fail to match the market over a 10 year period of time. Only 4% make it. They're constantly changing. So the statistic I want people to know is if you missed the 20 best trading days in the last 20 years, just 20 days in 20 years. One day a year in 20 years. And you're wrong, you're wrong on timing. Your 8.2 doesn't drop to 4.5, it drops to 2%. You might as well been on a wing of bond, have no fluctuations, no risk. If you miss the top 40 trading days, to give you an idea, you are minus 2%. So you gotta get in the market. And if you're saying, what about my timing though? Study was done by Schwab. If you got the perfect timing for the year, the right day, the best possible day to buy some people, the worst day, someone else. Dollar cost averages. Keep spending the same amount every month regardless of prices, and somebody stays in cash. Who has the worst return?

The guy trying to time or no cash? The cash.

You get nothing for cash.

Gotcha.

The guy who was the best had the best timing.

Got it.

The guy that was the worst. The guy. The dollar cost average and the one that was on the worst day were almost identical. But after seven years, there was only a $20,000 difference in accumulated assets between the worst day and the best day. The worst was not being in the market.

Right.

See, you got to be there. And I'm not saying put everything in stocks, we teach in the book, all these different aspects, but stocks in the last two centuries have provided the highest return. So you have to have significant exposure to that if you want to get the highest return. Got it.

And what I love in the book, you say that 80% of financial success is psychological, 20% is mechanical.

Right.

So it's not about timing and trying to like, figure all these things out and when's the best thing or the best fund or best fund.

This is not about trading. It's about investing. Trading is trying to do that. And most people lose money trading. Even the guys that tell you make money see it all, they're making money two or three years from now. They usually eat the dust, Right?

Exactly.

So, yes, you've got to have the psychology. And my best way of psychology is not the pump you up if you want to be unshakable, you want to be educated and you want to know the facts. You want to know, look, every five years I'm going to get a bear. Maybe three years, I'm going to get a correction every year, but I'm going to be in the market, make money. Do you know that six of the 10 best trading days in the 20 years happen within two weeks of the worst trading day? So people need to understand, you got to be in the market because the worst days will bring you your best days.

Thank you so much for watching this video. And if you're looking for more greatness in your life, then check out this next video right here.

I'm going to seem like a cheapskate. I'm going to seem like I'm trying to get something for nothing.

So emotional anchoring. Yeah.

Is it a ridiculous idea for us to talk about you selling me your company?