Dan Martell - I Asked Tony Robbins How to Go From Broke to Billionaire

00:00:00.000 I had four different fathers. We were always broke. They're all good men, and we had no money for food.

00:00:04.720 You could be a really good person and work really hard and have nothing.

00:00:08.780 We're all equal as souls, but we're not equal in the marketplace.

00:00:12.840 We are here with the legend, Tony Robbins.

00:00:15.160 If you had $1,000 or $100 million to invest, the most important decision you're going to make is not whether you're going to invest in an Apple or buy this piece of real estate.

00:00:22.900 It's your philosophy of investing.

00:00:24.820 Who are the wealthiest people in the world? What industry are they in?

00:00:27.220 When I ask most people, they think tech completely wrong and they think real estate wrong.

00:00:31.340 It's I asked Ray Dalio, the most successful hedge fund guy in the history of the world.

00:00:36.220 Is there one principle that's the most important principle to becoming financially successful?

00:00:40.680 He said, Tony, I wrestled that for 12 years and I can tell you what I call the holy grail of investing.

00:00:47.260 Welcome, everybody. We are here with the legend, Tony Robbins.

00:00:50.440 Tony, thanks for taking some time today.

00:00:51.940 Thanks for having me on.

00:00:52.740 I'm really excited. We're going to dive into your book.

00:00:55.440 You wrote the third book in the trilogy, The Holy Grail of Investing, and it is a banger.

00:01:01.660 I spent the last, there you go.

00:01:03.080 We're going to get you the regular one.

00:01:04.340 The real thing.

00:01:05.360 Before I get into it, I've got a question for you.

00:01:07.240 Sure.

00:01:07.620 I was at one of your events six years ago.

00:01:10.920 I got introduced to your work, an incredible event.

00:01:13.240 And you said something on stage that it just hit me.

00:01:17.260 You were talking about your backstory and all the challenges, and you kind of just said,

00:01:22.220 I built this MF-er. 1.00

00:01:23.860 Like I built Tony.

00:01:26.120 It just struck me because I was like, wow, like this is how it works.

00:01:29.380 When you think of like the new year, how do you decide what areas of your life do you want to kind of go deeper on and expand?

00:01:36.960 Well, I don't believe in just doing New Year's resolutions because they don't work, obviously.

00:01:40.780 When people call it New Year's resolution, 91% of the people don't follow through.

00:01:44.140 That's the statistic.

00:01:45.440 I don't know how accurate it is, but it's probably pretty accurate.

00:01:47.960 And I think it's because they express what they want, but they don't really have a path or a plan or a strategy.

00:01:54.840 And so it doesn't last.

00:01:57.260 And so I think it's really critical that you don't just come up with something you want to do that you have some idea of.

00:02:02.480 It's like I always tell people, if you want to make progress in anything, you've got to get on the path.

00:02:06.140 Well, how do you know if you're on the path?

00:02:07.720 Well, whether it's your finances, whether it's your business, whether it's your relationship, whether it's your body,

00:02:12.140 The first thing is do you know exactly what you really want and do you know why you want it with enough reasons, strong enough reasons to get you through?

00:02:20.320 If you're not clear what you want, most people are clear what they don't want.

00:02:22.760 I don't want to live this way. I don't want to be this way.

00:02:25.620 Focus goes where energy flows. Energy is going to flow where you focus.

00:02:29.700 So the whole focus is what do you want with precision and then getting those strong enough reasons.

00:02:34.260 And then the second step for people that I look at is, okay, all right, if this is what I really want, I got strong enough reasons, what's kept me from that in the past?

00:02:42.140 And you got to see where the gap is between where you are and where you want to be if you're going to close it.

00:02:46.660 So you got to be clear.

00:02:48.100 And when I do that, I found there's really only five things that create that gap.

00:02:51.620 The first one that gets in the way is fear for almost anybody.

00:02:54.840 Fear of failure, fear of success, fear of not looking at some fear.

00:02:57.660 But then the second one might be limiting beliefs.

00:03:00.120 Like, you know, I've tried everything.

00:03:02.040 Well, that's what you say to yourself.

00:03:03.660 That's what I used to say to myself when I couldn't lose weight.

00:03:06.100 I hadn't tried everything.

00:03:06.820 I tried everything.

00:03:07.340 I would have been fit.

00:03:07.900 And I eventually tried lots of things and got fit and stayed fit, right?

00:03:11.400 Or, you know, all the good ones are gone, right, you know, in a relationship.

00:03:15.080 So those beliefs can keep you from making progress.

00:03:17.680 And unless you change those, setting a new goal doesn't mean anything.

00:03:21.840 The third thing that can get in the way is some other emotion like overwhelm or stress or sadness or depression or feeling sorry for yourself

00:03:29.360 or any other emotion that slows the accelerators of your life.

00:03:33.880 And then the fourth thing that can get in the way for people very often is habits.

00:03:37.440 So you say you want to lose 20 pounds, and the first thing you do in the morning is go to Starbucks and have a smoke-a-mocha, whatever.

00:03:43.460 It's not going to happen.

00:03:44.500 You've got the wrong habits, right?

00:03:46.100 It's one thing to have, you know, resolve you want something, but that resolution isn't real if you don't have rituals to back it up.

00:03:53.280 And so you've got to come up with what those habits are.

00:03:55.760 Or the last thing you might be missing is you just might be missing the skill.

00:03:59.480 Like, you know, finance, most people don't know how to get asymmetrical risk-reward.

00:04:03.800 They don't even know what it is.

00:04:05.000 But every billionaire knows, right?

00:04:06.980 That's how they became a billionaire, the ones that started with nothing.

00:04:09.620 They don't take giant, insane risks.

00:04:11.700 They figure out what's the minimum risk or the most amount of upside that I can possibly get.

00:04:16.020 And they do that over and over again, and you're going to eventually win.

00:04:18.500 So if you don't know certain skills in a relationship, certain skills in how to run your business,

00:04:22.760 certain skills in how to make your body go, then you're probably not going to make the progress.

00:04:27.800 And once you know that, then you come up with your massive action plan,

00:04:31.340 and you don't wait until it's perfect.

00:04:32.520 You take action, and then you go slay your dragons.

00:04:35.120 You do the hard work.

00:04:36.060 you change the belief. You change the pieces. You get some daily practices. You keep measuring and

00:04:40.880 improving and you'll get to where you really want to go. And then you'll come up with the next

00:04:44.280 journey. You know, it's like life is a journey. It's like the hero's journey. So I look at it

00:04:48.180 that way. I look at it as saying, I got to get clear what I want now at this level and what the

00:04:53.500 increases are and then what's gotten in the way. And then what am I going to do? Let me go get

00:04:57.820 what's in the way out of the way. And then let me create some daily practices that virtually

00:05:01.600 guarantee it it's kind of awesome to watch because even six years ago i've seen your approach to your

00:05:07.280 interventions kind of kind of evolve right they're they're a little different they're softer and we've

00:05:13.040 got um so much to dig into i'm just curious why this book like why why choose to i was telling

00:05:20.320 you earlier that it's like you there's a difference between retail investing and professional

00:05:25.280 investing you went into the world where all the rich people you know the people say it's a rich

00:05:30.080 get richer you went to where the people that know how to make money they shared their strategies

00:05:36.240 why this book why now well it's the final it's a trilogy and i didn't expect to write three books

00:05:42.720 i wrote the first book a little 670 page little monster number one new york times bestseller

00:05:47.760 still the best-selling financial book of this century century's only 24 years old but still

00:05:52.080 i'm proud of it because i wrote a book i wanted my billionaire friends could get value out of but so

00:05:56.720 So could a person who's just beginning the journey.

00:05:58.660 So I really am proud of that book and it's like soup to nuts.

00:06:01.680 And I learned so many things by interviewing 50 of the greatest investors in the world

00:06:05.600 at that time.

00:06:06.600 That's why I did it.

00:06:07.600 I thought I knew a lot.

00:06:08.600 I certainly did.

00:06:09.600 I've worked with Paul Tudor Jones, one of the top 10 traders for 24 years.

00:06:12.600 He hadn't lost money during that time, so I learned a lot from him.

00:06:15.960 But I want to learn from everybody.

00:06:17.420 And I learned four things fundamentally.

00:06:19.560 I learned don't lose money as their first focus, which that's not most people's because

00:06:24.380 they know, you know, if you talk to Warren Buffett, you know, his rule is rule number

00:06:27.860 one, don't lose money. Rule number two, see rule number one, right? Well, that's ridiculous.

00:06:31.760 Of course you're going to lose money, but their focus is not to lose money because if 0.56

00:06:35.460 you're only trying to make money and you don't look at the downside, you're going to get

00:06:38.980 hurt. And if you have a stock that drops 50%, you don't need 50% to get even. You got to

00:06:44.080 get a hundred percent return to get even, right? So the way they do that is the second

00:06:48.540 principle, no matter whether they're a macro trader or they were a value investor, it

00:06:52.760 didn't matter. They all look at the way to protect themselves as having the right asset

00:06:57.480 allocation. That's one of the reasons I wrote this book. Because asset allocation is big

00:07:01.280 words for some people, but all it means is if you added $1,000 or $100 million to invest,

00:07:07.040 the most important decision you're going to make is not whether you're going to invest

00:07:09.880 in an apple or buy this piece of real estate. It's your philosophy of investing. And you

00:07:14.960 think of it as two buckets, primarily. A bucket that's a security bucket where you're going

00:07:19.420 to take some percentage of your money. You're going to decide in advance. It's always that

00:07:22.560 percentage. 20%, 30%, 40%, 50%, 70%, whatever it is, is going to go in a place where it's low risk

00:07:28.420 and less returns. So it's going to take longer to get there. But because it's low risk, you're

00:07:34.140 going to get there. It's like the turtle versus the, you know, the hair type race. Then how much

00:07:38.440 you're going to put that's in a risk bucket. Now on the risk bucket, you have the potential for

00:07:42.700 huge upside, but you'll still have the potential for big downside. And so what is that? Is that

00:07:47.280 50-50, 60-40, 70-30, 30-70, and, you know, explain to people how to do that. But what I found out

00:07:53.100 over the years, and now there's plenty of reports to back it up, is that the ultra-wealthy have over

00:07:59.080 46% on average of their money in private equity, private real estate, and private credit. That is

00:08:06.880 very different than 90% of the population. That's less than 5% of that in there. Most people, they 0.90

00:08:11.740 go and they put their money in stocks and bonds in their home and maybe a REIT. Those are the types

00:08:15.200 of things where most people are moving them around. Now, why does that matter? Well, diversification

00:08:19.900 was the fourth principle that we all know. Don't put all your eggs in one basket. But

00:08:24.220 when I interviewed Ray Dalio, the most successful hedge fund guy in the history of the world,

00:08:28.760 he's now managing almost $195 billion, to give you an idea. Manages sovereign funds,

00:08:33.740 you know, pension funds. Brilliant guy. In 2008, when things dropped, what is it, 34%,

00:08:38.700 if I remember right, he was up 8% to give you an idea. I mean, just genius. He warned

00:08:42.600 everybody about it so i asked him when i first met him 12 13 years ago and we're just becoming

00:08:48.600 friends i said you know of all the things we've talked about is there one principle above anything

00:08:53.320 else that's the most important principle to becoming financially successful as an investor

00:08:57.800 and he said tony i wrestled that for 12 years and i can tell you what i call the holy grail

00:09:03.000 of investing that's where the title comes from it's not from me it's from him and i said what

00:09:06.840 is it he said think about it tony once you know the fundamentals that you know and asymmetrical

00:09:12.040 risk reward is one of those as well right so once you know those principles you've got a great

00:09:16.440 opportunity but people want to get to their goals and they want to get there faster and most people

00:09:21.160 are behind so the only way to get there faster is get higher returns or put more money in which a

00:09:26.280 lot of people don't have or you take higher returns you just got to take bigger risks

00:09:31.400 then you can lose everything and now it defeats itself plus all the stress involved he said so

00:09:36.200 I figured out a mathematical principle if this is his principle holy grail if you can find eight to

00:09:43.160 twelve uncorrelated investments now correlated so your audience knows or uncorrelated a simple

00:09:49.560 example stocks and bonds when the economy is going great most people put their money in stocks because

00:09:53.960 companies are growing you get a bigger return when things are trouble they're counting on their bonds

00:09:58.040 to balance them out because they're supposedly non-correlated except when we have these big

00:10:01.960 crashes they all drop and your broker goes i don't know it's not supposed to do that right

00:10:06.440 and what i learned from ray is that happens all the time and he explained why which we won't take

00:10:10.520 the time to do right now but here's what he said if you can find eight to twelve uncorrelated

00:10:14.680 investments you reduce your risk eighty percent tony and increase your upside i'm like are you

00:10:22.040 serious and he showed me how it works in the math it's all detailed so then i went to go to work how

00:10:27.160 do i find eight to twelve things that aren't tied together in some way and the world is tied together

00:10:31.160 so much in the public markets and so then i started looking at private assets and it's like wait a

00:10:36.600 second here's a nice statistic for your audience in the last 35 years every year public stock

00:10:43.880 markets have produced a lower return than average not the best i interviewed 13 of the very best

00:10:50.200 the biggest in the world in private equity and private credit but the average has outstripped

00:10:55.560 every stock market in the world in terms of profit so i'll give an example most people

00:10:58.680 familiar with the S&P 500 index, top 500 companies. Well, if you go through the S&P index and you say,

00:11:04.920 how's it done over the last 35 years? It's produced an average return compounded at 9.2%.

00:11:10.920 So that's pretty nice. If you're getting 5%, it takes you 14 years to double your money.

00:11:14.760 You know, 9%, you're doing it in eight years. But average, not great, average private equity

00:11:20.520 did 14.2% at the same time. So you were getting 50% greater returns every year, compounded year

00:11:27.480 year after year. So you know what that means. If you put a million dollars away 35 years ago and

00:11:32.200 put it in the S&P 500 and forgot about it without doing anything, it's worth 26 million dollars

00:11:37.120 today. But if you took the same million dollars and put it in private equity, average private

00:11:41.200 equity, it's worth 139 million dollars today, 500% more. So it became a no-brainer to say you

00:11:49.660 can't put everything in private equity. You still need public markets, but maybe we should model the

00:11:54.140 asset allocation of the smartest people on earth. So then I went to go work on that. And Dan, you

00:11:59.120 know, because you've done well in your life, you know, there's only a few players that are the best

00:12:04.260 in the world. And access, it's not available to everybody. How do I get access? And then there's

00:12:10.280 a second problem, which is, okay, if I'm going to, for me, first it was just access. Like, you know,

00:12:14.320 I know a lot of people, I've got a good brand, I've helped a lot of people, so I got access to

00:12:18.260 some. But it's kind of like trying to get access to the new SP3, you know, three Ferrari that's

00:12:23.920 $4 million. Even if you have the money, you can't get it because it's only sold to the guys that

00:12:28.660 already bought before. And that's what happens here. All the pension funds, all the sovereign

00:12:32.780 funds, all these people get those spaces. So I would get little slivers. And one day I was

00:12:37.800 talking to a good friend of mine who was one of Paul Tudor Jones's partners who started his own

00:12:41.420 firm, really successful guy. I was talking about my frustration that I've gotten a few of these,

00:12:46.940 but you know too small to have a real impact and he said tony he goes you've been a good friend to

00:12:53.500 me you've helped me in so many ways i'm going to help you i'm going to tell you where i put most

00:12:57.260 of my money i said most your money he said yeah he goes there's this place in houston i said houston

00:13:01.420 i thought he was going to say singapore london new york connecticut he goes this group they're

00:13:06.380 they're one of the best in the world and they've found a way where you don't have to get in the

00:13:10.780 fund see when you invest in a fund you're called a limited partner where you're an owner you're

00:13:15.660 called a general partner, right? Just for your audience's clarifications. And he goes,

00:13:19.680 you can buy a piece of the general partnership, a slice and own the business. Now these guys,

00:13:25.500 these are the masters of the universe financially. Who are the wealthiest people in the world? What

00:13:28.780 industry are they in? When I ask most people, they think tech, completely wrong. Then they

00:13:33.580 think real estate, wrong. It's financial services, but it's not hedge funds because they go up and

00:13:38.400 down. These guys in private equity have a really unique approach. There used to be 8,000 companies

00:13:44.020 in the stock markets. There's only 3,700 now. And in the S&P 500, five of the companies

00:13:50.700 produce 25% of all 500. It's so concentrated. But most companies, most companies in the

00:13:58.060 world are privately held. And these private equity firms come in, and they don't just

00:14:02.480 try to buy at the right time. They buy a company or a piece of it, but then they add value.

00:14:08.160 They change the marketing. They bring in new tech. They bring in a new CEO. And they grow

00:14:12.760 the company, and then they sell it for a multiple to a bigger company, or they take it public.

00:14:17.340 They tie up your money for five years. Why would people do that? Well, because the kinds of returns

00:14:21.540 they get are so much better. People say, I'm happy to have some of my money be tied up for

00:14:25.040 that kind of return. For them, that means they don't have to worry about the markets going up

00:14:29.140 and down. So when it goes down, they can buy. When it goes up, they can sell. That's why they get such

00:14:33.980 unbelievable returns, and they're adding value. They're not just trying to find the right thing

00:14:37.120 the right price so i was blown away seeing those results and it's like okay how do i do this and

00:14:43.360 what i found out is you know they get their two and twenty for those unfamiliar when you give them

00:14:48.000 your money they get two percent per year that's what they charge on your money whether they make

00:14:53.840 and they get twenty percent of the upside well people are willing to do it because it's not

00:14:58.240 uncommon for a firm to go from a billion to two billion in five years they make a hundred million

00:15:03.040 in fees over those five years they make 200 million the 20 percent of the next billion they

00:15:08.080 make 300 million dollars in a billion dollar investment that's why they're there and most of

00:15:11.280 them the ones i interviewed are 35 50 100 billion dollar firms so you get the idea of how they are

00:15:17.280 and they've all done 20 or more compounded for decades one guy in the group has done 36 compounded

00:15:23.840 for 26 years i mean it's it's crazy so then i thought okay well i can help my friends wealthy

00:15:31.440 friends but then the reason i wrote the book final answer to your question is because i had

00:15:35.680 all these principles of the distinction i own 65 of the biggest companies in the world i'm getting

00:15:40.400 the 220 right beside the owners and i got their business when there's no inflation their business

00:15:44.640 with inflation their future i got private credit firms so i was like i'm out of my mind then i

00:15:49.440 saw that congress finally did something it always bugged me i was complaining that look the richest

00:15:55.360 people in the world get access to the best investments people need to grow it don't get

00:15:59.440 access because the law says you have to be an accredited investor or even higher in some of

00:16:04.260 these firms and that means you have to have a million dollar net worth already not counting

00:16:07.980 your house or two hundred thousand dollars in annual income right so congress saw what i believe

00:16:14.620 was true i didn't have to do with it but they just passed across the congress and now the senate's

00:16:18.840 taking it up it should get passed hopefully the next two or three months because it's bipartisan

00:16:23.240 and the first one already passed and they said look you shouldn't have to have a certain amount

00:16:28.340 money to do this you should just know what you're doing some people build a business or they inherit

00:16:33.540 money when they get to do it they're not sophisticated you take a test you study and

00:16:37.700 take the test and then you can have access to these same components so now the world can have

00:16:42.660 access to this so that's why i decided to bring this out at this time but if you can imagine being

00:16:47.620 able to have all that income like you would get from let's say bonds at the same time like the

00:16:53.300 the income is between 8% and 10% on most of these firms each year, just on the fees that's

00:16:57.260 guaranteed. So when I invest in the firm, 80% of my investment is already guaranteed just by the

00:17:02.760 income coming back from the guaranteed fees, and then I get the upside of the 20%. And we've had

00:17:07.820 one firm that was doing, I think we started them when they were doing $3.8 billion or something

00:17:14.260 like that, and now they're at $22. It doesn't take a lot more employees to do that, by the way.

00:17:19.900 The profitability of that firm is through the roof.

00:17:22.220 And by the way, if that firm gets sold to a bigger firm,

00:17:24.400 I'll get the multiple on that business when it gets sold.

00:17:26.780 So it's pretty amazing.

00:17:28.060 And so I walk people through all these different avenues

00:17:31.240 so you can do something that's not correlated,

00:17:34.380 so you can have 80% less risk and have more upside.

00:17:37.480 It's interesting because going through the book as a business nerd,

00:17:40.940 I'm loving each chapter is exposing me to these new investment strategies.

00:17:45.240 My three favorite for people listening is the GP stakes you touched upon.

00:17:49.400 The private credit, which was obvious in hindsight when she started unpacking that, and then sports team ownership, which I know you've got to stake in the Sacramento Kings, Team Liquid on the eSports side.

00:17:59.540 What investment kind of category did you get most excited about talking to all these incredible investors that you decided to kind of pursue or which one do you think was most fascinating for you?

00:18:11.980 Those three are probably my favorite, although I've got a huge amount of money invested in the energy sector as well.

00:18:17.140 for that's yeah you had two chapters dedicated to energy yeah because i got a project in hydrogen

00:18:21.860 that's unbelievable right now so i'm so excited about that and has unbelievable returns but i

00:18:26.340 would say uh owning these companies where you get to be a partner with the smartest people in the

00:18:31.220 world that's pretty hard to beat but let's take private credit for example in 2021 just a couple

00:18:36.340 years ago you could make no money on bonds before they raised interest rates right so what bonds

00:18:41.220 went crazy were junk bonds and they call them high you know high income bonds right but they're just

00:18:46.660 junk they're terrible and if you remember 2021 you can get one or two percent somewhere else but

00:18:51.700 you get 3.9 percent on junk bonds taking huge risks and of course that industry imploded right the

00:18:58.260 market dropped to the floor when everyone else is taking these giant risks at 3.9 percent i was

00:19:02.900 getting nine percent on private credit private credit is just since 2008 the banks have tightened

00:19:08.260 up you most people know about what happened recently for example silicon valley and so forth

00:19:13.620 banks so what happens is most banks are not loaning to the majority companies that need it

00:19:19.380 so they go to these private equity people they really know how to vet companies

00:19:23.140 and they loan to the same companies over and over they provide that capacity

00:19:27.380 now the beautiful thing about private credit is they have a one percent failure rate no bank on

00:19:32.900 banks would die for that kind of return because these guys know what they're doing and they stay

00:19:36.740 with the very best people so incredibly safe three times the return is if you did junk bonds at that

00:19:42.740 time but now the interest rates have rised now by the way i own those firms too so i have two

00:19:47.380 and twenty on those as well not just the investment but what's been amazing is if you bought a

00:19:52.340 mortgage and it was at three percent and it was fixed you're happy right now you don't care that

00:19:56.580 interest rates went up because the only seven percent doesn't affect you but if you had a

00:20:00.580 floating rate you might be paying three times as much as you were a few years ago well in business

00:20:06.260 those are always floating rates so we loan money to people in these firms let's say at five and six

00:20:10.180 percent originally and now the rate is rising now they're paying us 12 and 13. now get a sense of

00:20:16.820 what the profitability is on that's the same loan with the same people with no additional expense

00:20:22.740 and our profitability is through the roof and i got the 2 and 20 on that as well so i love that

00:20:26.980 but the one that's most fun is sports because i'm a sports guy you know i wanted to be a

00:20:32.020 professional baseball player my one of my forefathers was a semi-pro baseball player

00:20:37.140 But I started late. I wasn't that skilled, and I got clear that that wasn't going to happen by the time I got to high school.

00:20:43.240 So I started to look at a different path, but the bottom line is I was like, someday I really want to be a sports team.

00:20:48.960 It seemed like such a huge thing.

00:20:50.440 Well, you know, about a little less than a decade ago, I finally had enough money and enough resources and some good partnerships,

00:20:57.320 and I invested in the LAFC Football Club.

00:21:00.460 We created the club. We built the stadium with my partner, Peter Gruber, and a group of other partners.

00:21:04.080 and it was fun and I enjoyed it and then I moved to Florida so I'm nowhere near there

00:21:08.080 but I still enjoyed owning a sports team. Well I wanted to own more and then as you said I bought

00:21:12.680 a few others but then in the last three years there's been a new rule change and other than

00:21:19.140 the NFL all the other sports leagues now have a way it only a few firms can do it because you

00:21:24.360 can't use leverage there's a bunch of rules around it but you can buy a piece of more than one sports

00:21:29.440 team. So now I own, not only do I own the Warriors and the Dodgers, but I own the Red Sox and the

00:21:35.480 Sacramento Kings, I own the Pittsburgh Penguins in hockey. It's amazing what you get to have a

00:21:41.700 piece of. And to give you an idea, like Michael Jordan bought his Charlotte team, the NBA team,

00:21:47.380 for $275 million about 12 and a half years ago. A group of people, including us, bought that

00:21:52.780 interest for $3 billion. $3 billion. That's his return on 12 years. Another example is just the

00:22:00.100 average. These investments are no longer just butts in seats. And by the way, it's not correlated

00:22:06.440 to the stock market. That's the power. So when inflation hits, they just raise the price of a

00:22:10.840 hot dog and people pay it. But it's no longer just butts in seats. It's also media. So when Peter

00:22:16.000 Gerber and his partners originally bought the Dodgers, and they paid $2 billion for them.

00:22:22.340 And everybody thought they overpaid.

00:22:23.900 Everybody thought they overpaid.

00:22:25.080 The most any sports team I'd ever gone for was $800 million baseball team.

00:22:28.820 And people thought they were worth a billion.

00:22:30.720 They were an amazing franchise.

00:22:31.840 But $2 billion?

00:22:32.840 So I went to Peter because I'm going to be part of this. 1.00

00:22:34.800 I'm like, Peter, I know you're no idiot. 0.98

00:22:36.780 You're the smartest people alive. 0.99

00:22:39.060 How are you doing this?

00:22:40.240 I'm going to pay $2 billion.

00:22:41.900 And he said, Tony, you know me.

00:22:43.100 I'm a movie producer.

00:22:44.160 He said, you've got to have a cliffhanger.

00:22:45.600 He said, I'm going to announce it on Tuesday.

00:22:47.920 Once you're here, come to the house.

00:22:48.980 We'll have a little party together and we'll laugh.

00:22:51.200 They announced it on Tuesday.

00:22:52.880 He sold the local TV rights for $7 billion and made $5 billion net immediately.

00:22:59.360 And when you own a sports team, you keep your local rights,

00:23:02.220 but you also get an equal share of everybody else around the nation.

00:23:06.640 So whether you're a small team or a big team, you get your percentage of that.

00:23:10.120 And they own real estate.

00:23:11.740 So the average return in the last 10 years across Major League Baseball,

00:23:15.220 the NBA, Major League Soccer, and hockey,

00:23:18.660 If you took those four and merged them, the average return is 18% compounded per year.

00:23:24.200 It's been 11% for the S&P 500, and it's not correlated.

00:23:27.240 So it's an amazing opportunity.

00:23:29.420 It does really well.

00:23:30.260 And you have a legal monopoly.

00:23:32.000 No one else can compete with you in that city, in that sport.

00:23:34.740 You own it.

00:23:36.320 And your customers are literally fanatics.

00:23:40.880 That's where the word fan comes from, fanatics, multi-generational.

00:23:44.380 So it's an amazing business, and it's fun, and it's enjoyable.

00:23:47.460 and people can be involved with it now like they never could before yeah it's it's a fun one and

00:23:53.180 it was so cool reading the examples in the book um tony obviously you got the chance to meet uh

00:23:59.240 and interview some of the best some of them are my heroes robert f smith from this as a software guy

00:24:03.960 he's the goat right vinod kosla david sacks like i met david sacks 13 years ago and he's just become

00:24:11.840 literally the category king in sass out of all those people what like does anybody stand out or

00:24:19.040 do you feel like they all have their genius like what did you learn talking to these these wizard

00:24:23.680 of the financial world i learned so many things and they're in the book but uh but i looked also

00:24:28.160 for common patterns because then you see universal principles that work and by the way you know sax

00:24:33.280 is genius original original paypal mafia is an unbelievable guy and i love him personally but

00:24:39.120 But, you know, I think Robert Smith would take offense to he's the owner of SaaS because Robert is the owner of SaaS.

00:24:45.760 Robert's got a $100 billion firm, and I can't say what his returns are because you've got to get the prospectus to do it legally.

00:24:52.200 But just he's the highest return of anybody that I interviewed for the longest period of time.

00:24:56.760 It's mind boggling what he has done.

00:24:58.440 And he started with absolutely nothing.

00:25:00.020 What I found really most interesting was the way they think about business and entrepreneurship.

00:25:06.920 When I interviewed the 50 smartest investors in the world, traditional investors, Ray Dalio, Carl Icahn, Warren Buffett, you know, Paul Tudor Jones,

00:25:15.060 they all have different ways of doing things, but they're trying to buy something at the right price, right, and the right time.

00:25:21.140 What's so cool about private equity is the best people, they're not buying just trying to get, they like to get a great price.

00:25:28.100 But they're going to, their entire focus is adding value.

00:25:31.980 What I mean by that is when I first met Jim Rohn, my original teacher,

00:25:35.680 he answered one of the most important questions I had burning in my life,

00:25:38.800 and it changed my life.

00:25:40.200 I had four different fathers.

00:25:41.480 We were always broke.

00:25:42.240 The reason I provide 100 million meals a year,

00:25:44.420 I've done a billion meals in the last eight years,

00:25:46.560 is because someone provided food for my family when we had nothing when I was 11.

00:25:49.980 I never forgot it.

00:25:50.920 It started with two families, four, and built up.

00:25:53.140 Well, if you look at somebody like what Robert's done,

00:25:56.920 Robert's been in a position where he started with literally nothing,

00:25:59.400 and he built up, but he did it based on the principle that I learned from my teacher, Jim

00:26:03.460 Rohn. Jim Rohn, I asked him, I said, how come my fathers, they're all good men and we're always

00:26:07.620 broke. We had no money for food. And he said, Tony, we're all equal as souls, but we're not

00:26:14.740 equal in the marketplace. I said, what do you mean? He said, Tony, you could be a really good

00:26:19.680 person and work really hard and have nothing. He goes, I brought up school teachers, you know,

00:26:25.760 how little they make and how unfair that is compared to this hedge fund guy.

00:26:29.540 And he goes, Tony, well, let's start with McDonald's.

00:26:31.360 He said, I'm not being derogatory, but it's not designed to be your long-term job.

00:26:35.580 It's an entry job because you don't get paid much because it's easy to learn.

00:26:40.260 Anyone can do that job.

00:26:41.760 So it's not valuable.

00:26:43.420 You're paid in proportion to the value you bring to people.

00:26:46.740 There's not a lot of value.

00:26:47.820 Today, there's machines now starting to replace these people in fast food places, right?

00:26:51.880 That's why they make so little.

00:26:53.160 But the guy you're saying is terrible, he said, your teachers, how many of them were truly great?

00:26:59.080 I said, well, I had some great teachers.

00:27:00.420 He said, how many?

00:27:01.200 Tell me them.

00:27:02.320 And I listed three.

00:27:03.700 And he said, yes, out of your entire education, there's three.

00:27:06.660 The others, would you agree, some were good, some were mediocre, some were terrible?

00:27:10.140 I said, yeah.

00:27:10.540 He goes, and they're helping 20 or 30 students.

00:27:14.380 He goes, so they're paid, and they're not in a position where if they do well, they're paid more because they wanted a guarantee.

00:27:19.880 And they got a guarantee, and they do a lousy job.

00:27:22.140 But if you want to put yourself on the line and be valuable, it's a very different game.

00:27:25.680 So he said, the guy you're making fun of or being derogatory towards,

00:27:30.000 most people in those days were getting 6% returns.

00:27:32.340 He goes, he got a 48% return on billions of dollars.

00:27:36.920 Those are people's pension funds.

00:27:38.440 That's their future.

00:27:39.340 That's their economics.

00:27:40.420 So he's worth a billion dollars because he added that much more valuable.

00:27:44.120 He said, you need to focus on finding a way to do more for others than anybody else in whatever industry you're in.

00:27:50.380 You'll build a brand, and you'll become dominant, and you'll have a blast because you're a giver, Tony.

00:27:55.080 You're not a taker.

00:27:55.820 You're going to be proud of what you're doing, not just make a lot of money.

00:27:59.340 And that's why I got these, that's actually 114 companies now total.

00:28:03.480 We're doing $7 billion in revenues.

00:28:05.920 And, I mean, every single company we built might have that obsession with adding value.

00:28:10.480 And that's what I saw in every one of these people.

00:28:13.440 They didn't just buy the asset or buy it right and then flip it over or cut it up in pieces like Private Equity used to do 20 years ago.

00:28:20.380 It's much more competitive now.

00:28:21.900 Now it's like, okay, you go to Robert Smith and you've got a SaaS organization.

00:28:25.700 He has built a system where you can take any SaaS company and grow it.

00:28:29.760 He knows how to bring the right CEO in the place, what the market piece, who are the right people, how can you advance the technology, how can you cut the cost.

00:28:36.780 So he makes it so valuable and then he sells it to a bigger company or takes it public.

00:28:41.140 So every single one of them was obsessed with adding value.

00:28:46.060 And that is really, really unique, but they do it in a different way.

00:28:48.440 So that's what Robert Smith does.

00:28:49.780 You know, if you go to Veritas Capital, you know, Ramsey, he was partners with a guy 12 years ago and a guy committed suicide and they had a $2 billion fund.

00:29:02.960 And the fund was, you know, it had a clause in your agreement as a limited partner that if anything happened to the original founder investor, you could take your money back.

00:29:14.320 There were no time limits on anymore.

00:29:15.660 so he literally met with every around the world every investor flew and met

00:29:20.100 with them one-on-one and said I want you to stay with us and here's what I'm

00:29:23.160 gonna do he built that from from 2 billion to 42 billion in 11 years his

00:29:28.140 expertise was he said I'm gonna go do business with the government government

00:29:32.400 buys more technology than anyone on earth and no one else has mastered it

00:29:36.840 I'm gonna fit they all avoid it I'm gonna go master it and own them and

00:29:40.380 again I can't tell you his returns but I'll just tell you they're gigantic

00:29:44.900 returns compounded over a decade continuously because he's figured out how to add value in

00:29:49.380 the government system. You know what I mean? If you look at somebody like Khosla that you know,

00:29:53.920 of course, I mean, he took one of his best investments, he took $3 million and turned it

00:29:57.800 into $7 billion, right? And how did he do it? He looks around and says, okay, what's a technology

00:30:04.140 that could change the world that will be a necessity? And he saw Juniper Networks. He said,

00:30:09.760 But I think that's where the web is going to have to go.

00:30:12.420 He made these bets and a little bit, 7 billion is not like a gross number.

00:30:16.880 That's the net return to investors off that investment.

00:30:20.460 So each one of them has vision.

00:30:23.300 Each one of them is massively committed to added value.

00:30:26.160 Each one of them has a system that they built.

00:30:28.860 They don't do it ad hoc to take any company in the categories they focus on and grow it.

00:30:34.760 Another reason I love doing this is I have these guys and they're all in different industries.

00:30:38.680 They're all, some of them are different countries.

00:30:40.680 You know, you go to somebody like MBK Partners, right?

00:30:45.680 And, you know, he's the, Michael Kim, he's the, what do you call it, the biggest investor,

00:30:50.680 the most successful private equity investor in basically Japan, China, Asia.

00:30:55.680 He's the richest, you know, South Korean in the world.

00:30:58.680 And it's like, how did he do it?

00:31:00.680 Same thing.

00:31:01.680 He figured out what Asian companies need. 0.78

00:31:03.680 He's specialized in that.

00:31:04.680 that so i think really knowing your market really knowing your ideal customer coming up with products

00:31:11.320 and services that produce raving fans coming up with an irresistible offer which is a lot of what

00:31:16.600 they do each time an offer that is so good that people say i gotta at least try it and that then

00:31:21.320 they over deliver they all seem to have that in common even though they're doing different

00:31:25.720 industries in different ways and have different forms of expertise it's so great i love the idea

00:31:31.720 because a lot of people they struggle with like should i go all in on my primary business because

00:31:36.120 i they hear diversification but it's like all these people mastered their game systematize it

00:31:41.720 created ways to again the asymmetrical results um i think that's awesome the the question i want to

00:31:48.200 kind of get closer as we wrap up is how has having a child as a 61 year old person change your

00:31:55.400 perspective on life tony i mean when you guys shared that sage and yourself it was inspired

00:32:00.200 for me i'm like wow this is really fascinating like how how does that change your perspective

00:32:05.560 on life and how you show up and how you think about your time right because i wrote a book

00:32:09.320 i'll buy back your time how has that impacted where you allocate your time well it's interesting

00:32:13.800 you know before you know i have five kids and five grandkids and my oldest daughter is 40 ain't going 0.99

00:32:19.800 to be 49 in about a month and my youngest daughter's coming up on three pretty soon it's two and

00:32:25.080 three quarters so i got quite a quite a spread but um the answer your question is i didn't want to

00:32:31.080 have both my wife and i uh she couldn't carry because of a problem with her body so we went

00:32:37.560 through ivf and went through all these processes for years and then our life was on the road to

00:32:42.680 and she's with me all the time and we don't want to be apart and i was on the road 250 days a year

00:32:46.840 so like i don't want to bring a kid into that experience just too hard especially at this stage

00:32:51.160 of life so when COVID happened and I found a way I could talk like I'm doing a seminar by the way I

00:32:56.920 should mention for your audience I do a free seminar every year I started with COVID because

00:33:01.960 you know people are trapped in their homes I was doing stadiums and suddenly stadiums said I could

00:33:05.880 put a hundred people in a stadium instead of 15 000 I was like so I built these studios and I

00:33:11.080 started doing these events and I said I want no one to stop by money if they're stuck at home I

00:33:14.920 want to be able to show them how to change their life from their home and I want to have to travel

00:33:19.480 obviously and so we put these events on for three days there's one coming up january 25th through

00:33:24.680 the 27th starts at 2 p.m eastern but we have people from 195 countries have come and we had

00:33:29.880 over a million people last year and we give you the way it's called time to rise if you go to

00:33:34.360 timetorisesummit.com timetorisesummit.com you get tickets it's free you can do it from your home

00:33:40.840 or your office bring your family and your friends but but uh the reason i bring this up is when i

00:33:45.480 could reach millions of people and go deep and do these giant events now like instead of 10 or 15

00:33:51.480 000 i got 40 000 people in the event and they're from 195 countries all over the earth at once

00:33:56.600 i was like we could have a kid and we could be home more i still travel but nothing like i did

00:34:01.960 and so we tried one final time and god blessed us and answer your question is it's been the

00:34:06.120 greatest gift of my life because i'm proud of how i've been as a father when i was in my 20s

00:34:09.880 now i married a woman who was 13 years my senior in my first marriage and she had been married

00:34:14.120 twice before and had kids from both their husbands and I adopted them all. So I was, you know, 24,

00:34:19.800 a 17 year old, an 11 year old, a five year old, and then went on the way. So at this stage,

00:34:25.320 it's very different. You know, I've got a lot more to even more to give. And Sage is such an

00:34:29.880 unbelievable mother. And we have such incredible family. So it's, it's changed things so that now,

00:34:35.000 you know, I have rituals, like I have dinner at 630. I've never had dinner a certain time before.

00:34:41.560 But I love it.

00:34:42.380 I love everything about it.

00:34:43.580 My daughter is a learning machine. 0.65

00:34:45.420 You know, at that stage of life, she's learning Chinese and Spanish and English, and she's

00:34:50.120 playing the piano, and she has time just to be a human.

00:34:52.960 And, you know, yesterday, flew a kite, which I would never be doing at this stage normally.

00:34:57.320 But I'm going to be 64 in a month.

00:34:59.000 She'll be three soon. 1.00

00:35:00.320 And I told my wife originally, I said, I'm not having a kid past 50.

00:35:03.220 I said, I'm not going to show up at her high school graduation at 70 years old.

00:35:06.560 Now I'm going to be 80 at her high school graduation.

00:35:09.120 But I got to tell you, it's the most beautiful thing in the world.

00:35:12.060 And I, without naming names, I had a very, very famous designer who I had dinner with one time with Steve Wynn at his resort.

00:35:20.560 And we were sitting at dinner and he was 65 and just had two children.

00:35:26.260 And I was dumbfounded.

00:35:27.560 And he went on and on the entire night about how it was the greatest thing in his life.

00:35:32.220 So that was where the seed got planted.

00:35:34.200 And then God made it possible because of COVID.

00:35:36.120 So I don't have to choose between my mission and my child.

00:35:38.140 get to do it all and she gets to attend the seminars and watch on tv we don't show pictures

00:35:43.100 of i don't even say her name because i want her to have a private life no social media

00:35:46.860 um so she can have just her own life outside of that but she gets to attend and sometimes comes

00:35:51.420 back and looks through the curtain sees what's going on but she because we do so much hybrid

00:35:55.660 you know live events and video base she gets to attend most of the events at this stage which is

00:36:00.220 just a blast it's cool tony to see you even at this stage push the boundaries of what's possible

00:36:06.060 and what you think you can do at different ages.

00:36:08.320 It's inspiring in a huge way.

00:36:10.680 Where's the best way?

00:36:11.440 I know the book comes out February 13th.

00:36:13.020 Everybody should go to Amazon, pre-order.

00:36:15.560 I believe there's actually a free audio chapter.

00:36:18.400 Can you talk more about where they can get that?

00:36:19.940 They go to the HolyGrailOfInvesting.com.

00:36:25.020 HolyGrailOfInvesting.com.

00:36:25.800 If they go there, they can pre-order the book

00:36:28.060 through Amazon or whoever they want.

00:36:29.320 But there's also the first chapter on audio

00:36:31.620 is there for free and you can listen to it if you'd like

00:36:33.380 because the book comes out in two weeks

00:36:35.200 so you can pre-order it, but you'll get a jump on it right away.

00:36:37.360 You can do it today if you wanted to.

00:36:39.220 Awesome.

00:36:39.700 Everybody, go get a copy of the book, The Holy Grail of Investing.

00:36:43.100 Tony, you've had an incredible impact on my life,

00:36:45.940 from the events to the books.

00:36:48.500 My brother and I remember that when the first one came out,

00:36:50.260 we devoured it, then the second one,

00:36:52.060 and I'm excited to share this one with him when it comes out.

00:36:55.220 February 13th, everybody, go grab a copy.

00:36:57.560 Tony, again, it's an honor.

00:36:59.000 Appreciate the time.

00:36:59.860 I want to thank you.

00:37:01.200 I want all your audience to know that I do this five-day boot camp

00:37:04.940 that I do for business is help them grow their business,

00:37:06.760 you know, 30 to 180%, depending on the type of business.

00:37:10.560 And you came in and did the piece on AI

00:37:12.540 and just was a home run.

00:37:13.660 So I can't tell people enough about how great you were there.

00:37:16.280 Thank you so much.

00:37:18.000 It was my honor.

00:37:19.460 It was appreciated.

00:37:20.420 Awesome, Tony, have an amazing rest of the day.

00:37:22.040 Everybody get the book.

Dan Martell - January 19, 2024

I Asked Tony Robbins How to Go From Broke to Billionaire

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