Investing is a key component of building wealth, but some investments will pay off much more than others. To find out more about the investments that have the highest returns, Tony Robbins spoke with 13 of the world’s most successful investors in private equity, private credit, private real estate and venture capital for his new book titled, “The Holy Grail of Investing.”
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Based on his interviews, these are the investments Robbins recommends for the most impactful returns.
Private Equity
The returns from private equity investments can eclipse what you would get from investing in stocks, Robbins said.
“If you look at the S&P 500 as an example, and say, ‘How’s it done over the last 35 years?’ Well, most of us know it’s gone 9.2% compounded over time, so about every eight years, you’re doubling your money,” he said while appearing on Fox Business’s “Mornings With Maria.”
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“If you took your same amount of money, and you put it into private equity, […] the average [return on] private equity has been 14.2% per year,” Robbins continued. “So imagine you’re making 50% more per year compounded over the decades. So as an example, if you put a million dollars in the stock market 35 years ago and forgot about it, it’s [worth] $26 million today. If you put the same amount of money for those same 35 years in private equity, it’s worth $139 million.”
Hedge Funds
While investing in hedge funds used to be reserved for the ultra-wealthy, it’s now possible for more people to invest in these high-return funds.
“You don’t have to fight to get into these funds anymore,” Robbins said. “You can purchase to be a part of the general partnership, meaning you get the two and 20. They get 2% per year whether they make you money or not, and they make 20% on the upside. But people are willing to do that because the returns are so amazing. You literally are shoulder-to-shoulder as partners.”
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Robbins has utilized this investment opportunity himself.
“I’m in 65 of these firms, where I’m a general partner — I’m not an investor or limited partner — and then you get access to funds that they’ve done in the past, the present ones and the future ones,” he said. “So it gives you incredible opportunities to prosper just like the people that own the business itself.”
Pro Sports Ownership
Like hedge funds, owning a part of a professional sports team used to only be accessible to the ultra-wealthy — but that’s no longer the case, Robbins said.
“Major League Baseball, the NBA, Major League Soccer, major league hockey [the NHL], all of them have found a way for minority interest to be made through private equity,” he explained.
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Through this pathway, Robbins has become an investor in the Golden State Warriors, the Utah Jazz, the Los Angeles Dodgers and the Boston Red Sox. Owning sports teams is part of Robbins’ “holy grail formula” for investing.
“The reason you want to do it is this whole book is about a formula,” he said. “Ray Dalio, when I asked him years ago, said the magic, the ‘holy grail,’ […] is finding eight to 12 uncorrelated investments that you believe in. If you can do it, you reduce your risk 80% and you keep your upside.
“Sports is uncorrelated,” Robbins continued. “Inflation goes up, they charge more for a hot dog, but today, they’re not just out there putting butts in seats. There are media opportunities, and there are real estate opportunities.”
Investing in pro sports teams also tends to have very high returns.
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“Over the last 10 years, these four sports have averaged 18% compounded over time — the S&P has been 11%,” Robbins said. “So these are higher returns. And it’s in a business — it’s a monopoly. Your fans are multi-generational, so it’s amazing to be able to have a piece of each of those, and it’s fun.”
