Tony Robbins: How To Build a ‘Money-Making Machine’
Written by
Nicole Spector
Edited by
Molly Sullivan
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Tony Robbins, famed motivational speaker and life coach, boasts a net worth of around $600 million. His fortune has been made on his own through his work, including writing books, speaking engagements and hosting seminars.
Robbins also owns 110 businesses with sales exceeding an estimated $7 billion annually. He is regularly referred to as a business guru, with American Express naming him one of the “Top Six Business Leaders in the World” and Fortune dubbing him the “CEO Whisperer.”
Outside of all that, there’s another critical aspect of wealth building that Robbins has embraced: making the money he earns generate more money. By doing so, he created what he calls a “money-making machine.” Here we will the review the five ways you can follow Robbins’ system on the way to generating your own wealth.
Embrace the Power of Compound Interest
You don’t need to be a multimillionaire like Robbins to create a money-making machine — you can work with the wealth you have. Even if it’s not a great deal, you should lean into the power of compound interest — a technique pretty much all financial experts swear by.
“Compound interest is interest that you earn on both your principal savings and the interest you’ve accumulated on those savings so far,” Robbins wrote. “Every time you earn interest, it’s reinvested back into your account along with your initial principal. The power of compound interest means that you then earn interest on the total amount, or ‘interest on interest.'”
Robbins and other money mavens are superfans of compound interest, not only because it swiftly builds up your net worth, but also because you don’t have to do anything. You just invest your money and watch it grow.
Use Money Market Accounts
Understanding the benefits of compound interest is one thing; getting started reaping them is another. One Robbins-recommended way to generate compound interest is to put savings into a money market account. Robbins particularly likes this strategy for beginners.
A money market account, Robbins explained, is “like a savings account, but with higher interest. And unlike a savings account, it provides some of the functionality of a traditional checking account, such as using the account to write checks or use a debit card.”
The accessibility of money market accounts is ideal. You could stash your emergency fund in one, provided you have the discipline to not touch it unless you experience hardship such as job loss or are hit by a financial curveball like a bill from a surprise hospital stay.
Take Advantage of a 401(k) or IRA
Part of the point of a money-making machine is that it helps ensure you have enough coming in to provide for a comfortable retirement. So, you should be using tools that are exclusively designed to help you amass savings for retirement. Invest in a 401(k) or IRA, which are money-making machines unto themselves.
“401(k)s are employer-sponsored retirement savings plans, while IRAs (individual retirement accounts) can be set up by any individual,” Robbins wrote. “With either option, your money will be invested in a portfolio of investments (index funds) you can choose.”
Robbins added that these retirement plan options are also great for beginners — but be mindful about fees that come with them and be sure you do what you can to minimize them.
Buy Dividend Stocks
When crafting your money-making machine, consider investing in dividend stocks, which, as their name implies, routinely pay out dividends to shareholders.
“They’re usually larger, stable companies, and while you might not get as large of a return as with more volatile stocks, you will likely get extremely reliable payouts,” Robbins wrote. “Over time, dividend stocks really add up.”
Invest in Real Estate Investment Trusts (REITs)
Another way Robbins recommended powering up your money-making machine is by investing in real estate investment trusts (REITs).
“REITs are groups that pool resources to buy and manage commercial real estate,” Robbins said, adding that real estate itself is a proven money-making machine. “You can invest less upfront and still gain the benefits of real estate ownership.”
It’s worth noting that time is of the essence here. Don’t delay building your money-making machine — even if you have a lucrative income stream.
“The rest of your life will be determined by your decision to use compounding interest to create lasting wealth for yourself and your family,” Robbins said. “It’s the simplest way to build a making-money machine that works while you sleep and get started on the path to financial freedom.”
Caitlyn Moorhead contributed to the reporting for this article.
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