Tony Robbins is one of the nation’s top life and business strategists. He’s a #1 NY Times bestselling author, incredible speaker, and is known for his infomercials and life changing self help books. He speaks on a number of topics, including business, leadership, and finances. Have you ever wondered what it would be like to have full financial freedom? Tony recently shared with us that although the importance of financial freedom to most people is high, it’s often how easy it is for people to push aside dealing with their finances because it is too complicated. Tony says that the path to financial freedom is rooted in the art of making good decisions. Below are the tips he shared to help you make better decisions with your finances, which can lead to a happier and more prosperous financial state!
Tony Robbins 4 Steps To Financial Freedom
1. Learn and Understand What You’re Doing
Tony says in order to invest without getting screwed, you need to understand taxes, compounding and fees. Ignorance will not bring you to a state of financial freedom. Controlling your finances is crucial to creating a healthy environment for yourself, your family and your sanity. Tony talks about how the biggest mistake successful people can make in their careers is not understanding their finances, and then if things fall apart, they’re left with nothing. First and foremost, understand your basic financial state and the key parts that make up your finances.
2. Start Compounding
Compounding is so powerful, and can be used to increase both income and wealth. Tony says how impactful compounding can be. He explains that if you decide to not go out to eat once a week, and save $40, you can save that $40 in an index fund. If you save $40 per week for a year, and put your money in that index fund and grow it, natural compounding will make that grow to half a million dollars just from saving $40 a week!
3. Determine Your Current Financial Situation
The best way to know how to reach a goal is to make sure you know where you are starting. In order to determine your current financial situation, you’ll need to answer a few questions:
What is your current income?
What is your current spending?
What kind of lifestyle would finance my dream home or dream vacation?
Knowing what state you are in financially will help you determine what you need to do in order to get to where you want to be.
4. Build Your Budget And Allocate It
It’s important to create a budget that meets your needs, not just the wants. You can’t control what other people are going to do with their money; you must focus on yourself and only you! Tony talks about determining the cost of your dreams. In order to get everything you want, you don’t necessarily need to buy everything you think is important for that. A lot of people think they need more money than they actually do in order for them to achieve their goals, but it doesn’t work like that at all. Spend money on the small parts that will lead you to the same end goal!
Hopefully you’re feeling a little more confident about your financial situation and what needs to be done for total financial freedom. If you want to hear more about how Tony Robbins maintains financial freedom check out the full episode!