Step 6 – Billionaires playbook – It’s time to meet the masters
Ray Dalio’s tips:
1 – Don’t lose – protect downside
2 – Risk a little to make a lot, look for home runs (asymmetric returns – risk/reward)
3 – Anticipate and diversify
4 – You’re never done learning, earning, growing, giving
I found this great video by Ray Dalio – How The Economic Machine Works by Ray Dalio
Tony Interviewed a bunch of billionaires to create this book. Instead of dragging it out, I just summarized some of their tips and thoughts from this chapter below.
1 – America needs to improve its management practices.
2 – Companies need to care about the rights of investors – put investors interests first.
3 – There are 3 levers we can control – asset allocation (which is #1), market timing, security selection. Have a long term buy and hold strategy.
4 – Investors as a group can’t beat the market because they are the market.
5 – Nobody knows nothin about the stock market.
6 – Corporate America will keep growing and earning and since the market is a derivative of this, it will continue to grow.
7 – Play defense – risk control is #1.
8 – Run a diversified portfolio.
9 – Never set yourself up for the knockout punch.
10 – The best time to buy is when there is blood in the streets.
11 – Put your real money in an index fund.
12 – Earn your own money, put some money aside, get an education, get a well-paying job, put money into 401K and make small sacrifices. Give up the small things to save more.
That’s it for this step. The last step is all about giving.
Get the entire book here on Amazon: MONEY Master the Game: 7 Simple Steps to Financial Freedom