Since Tony Robbins is already a #1 New York Times Bestselling author from his first book, Money: Master the Game (which I covered in my previous article “7 Simple Steps to Financial Freedom“), my first question was why did he publish a second book on the topic of financial and money mastery.

“That’s a great question, because I wrote 670 pages for Money: Master the Game and I think you know that I don’t like writing,” Tony Robbins said. “But I was so obsessed because after 2008 seeing everybody losing homes and half of their net worth and seeing nothing be done about it.” He wanted to give people a step-by-step guide to money mastery. And deliver, he did.

Tony Robbins is the master of identifying patterns. In Money: Master the Game, he interviewed 50 of the brightest minds in finance and did a deep dive on all the tools and techniques that some of the richest men in the world took to establish and grow their wealth. Now, in Unshakeable, Tony Robbins goes one step further by simplifying what you need to know in what he calls the Core Four.

“What I’ve found over almost four decades of studying success,” says Tony Robbins, “is that the most successful people in any field aren’t just lucky. They have a different set of beliefs. They have a different strategy.” And in studying the masters, Tony Robbins discovered there are four principles that “nearly all great investors use to guide them in making investment decisions.” He calls these principles the Core Four. “In short, the Core Four should be at the very heart of your investment playbook.”

Core Principle 1: Don’t Lose

When it comes to investing, most of us make the mistake of focusing on the wrong things. We ask “How can I make money?” instead of protecting ourselves against losingmoney. In his book, Tony Robbins points out that if you lose 50% of your investment, you actually need to make 100% in order to get back to where you started before the loss.

Tony Robbins cites many incredible examples of this core principle including Warren Buffet’s famous first two rules of investing: “Rule number one: never lose money. Rule number two: never forget rule number one.” He also talks about Ray Dalio, who has produced $45 billion in profits for his investors, who told Tony Robbins, “What I realized is nobody knows and nobody ever will. So I have to design an asset allocation that, even if I’m wrong, I’ll still be okay.” So when the billionaires are obsessed with not losing, then we need to, as Tony Robbins puts it, “design an asset allocation that ensures we’ll ‘still be okay’ even when we’re wrong.”

Core Principle 2: Asymmetric Risk / Reward

This is where so many of us get tripped up. Because we tend to focus on how we can make money (instead of not lose money) when investing, we fall into the trap of risking $1 to earn 8 cents. Think about your current investments. If you’re like most people, you’re invested in mutual funds that charge high fees, try to beat the market and risk every dollar you invest to make a target 8% return.

“But the best investors don’t fall for the high-risk, high-return myth,” says Tony Robbins. “Instead, they hunt for investment opportunities that offer what they call asymmetric risk/reward: a fancy way of saying that the rewards should vastly outweigh the risks. In other words, these winning investors always seek to risk as little as possible to make as much as possible. That’s the investor’s equivalent of nirvana.”

In this core principle, Tony Robbins talks about Sir Richard Branson who, before he launched Virgin Airlines, worked with the airline manufacturers to agree to let him give back the planes should his airline fail. That way, he gets maximum upside should his new airline succeed, while minimizing his risk if he venture fails. You see, Richard Branson may take all kinds of risks in his personal life, but when it comes to his business, he is a genius at asymmetric risk / reward.

Core Principle 3: Tax Efficiency

When it comes to the most successful investors, they are really smart about taxes. “They know that it’s not what they earn that counts,” says Tony Robbins. “It’s what they keep. That’s real money, which they can spend, reinvest, or give away to improve the lives of others.”

If you’re considered a “high earner” by the IRS, you could be paying an ordinary income tax rate that is as much as 50% when you combine both federal and state taxes. It’s really hard to keep your investments when you’re paying as much as half to the government. That’s why it’s critical to focus on your after-tax returns and to take advantage of both tax-efficient investment strategies (outlined in both of Tony Robbins books Money: Master the Game and Unshakeable). You also need to maximize your tax-advantaged investment vehicles such as your company’s 401(k), IRAs, and other tax-advantaged retirement and college-savings programs.

Core Principle 4: Diversification

Most everyone knows the importance of diversification when it comes to investing, but Tony Robbins breaks diversification down even further into four sub-groups:

  1. Diversify Across Different Asset Classes. Don’t put all your money in any single investment class such as real estate, stocks, bonds, or alternative investments.
  2. Diversify Within Asset Classes. No good diversifying asset classes only to have all your money in your favorite stock or investment property. You need to spread the risk among multiple stocks, bonds and properties (for example).
  3. Diversify Across Markets, Countries, and Currencies Around the World. Most of us make the mistake of only investing in our own country. Today’s investing is global in nature and so should be your investments.
  4. Diversify Across Time. While you’ll never perfectly time the market (getting in or out), you can use the magic of dollar cost averaging to reduce your risk and maximize your returns over time.

And that’s the Core Four. I’d love to say that this is all you need to know, but that’s not the case. Tony Robbins goes to great lengths to simply everything you need to know and do in order to follow your own financial freedom playbook. So I urge you to pick up your copy of Unshakeable. And, I was told in my interview with Tony Robbins, that when you pre-order now, you also get a free gift. Just like in Money: Master the Game, all of the proceeds of Unshakeable go to Feeding America, so you can join Tony Robbins on his mission to deliver 1 billion meals in the next 8 years.