Financial Freedom: A Proven Path to All the Money You Will Ever Need

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Published: 4/7/2020
In 2010, 24-year old Grant Sabatier woke up to find he had $2.26 in his bank account. Five years later, he had a net worth of over $1.25 million, and CNBC began calling him the Millennial Millionaire. By age 30, he had reached financial independence. Along the way he uncovered that most of the accepted wisdom about money, work, and retirement is either incorrect, incomplete, or so old-school it's obsolete.

Book Summary - Financial Freedom: A Proven Path to All the Money You Will Ever Need by Grant Sabatier

Key Insights

Financial freedom is possible. It’s when you wouldn’t ‘need’ to work in order to make money.

Find your Financial Independence Number. Define what your net-worth should be and move towards it.

Optimize your full-time job.

Start saving by increasing your savings rate every month.

Launch a profitable side-hustle.

Learn how to invest intelligently.

Fast-track your financial independence and retire early.

Grant Sabatier shares his journey to Financial Independence through this book. He illustrates how his net worth increased from 2.26 dollars to over 1 million in five years. Grant gives you actionable insights that you can use to attain true ‘financial freedom’. He defines the term as a state where you can do what you want with your life without ‘needing’ to work for money.

It is a motivational and inspiring story of how Grant overcame the setbacks of losing a job, envisioning a future he wanted, and how he worked towards it. If you are looking to retire early and be the king of your time, then this book is a great guide.

Key Points

Define your Financial Independence Number.

The first step to achieving financial freedom is to define how much money you need. In other words, it is the amount of net worth you need to become financially free. This number, called the Financial Independence Number, would differ from person to person and from time to time. You should not set this in stone. It is advisable to revisit this number once a year. You may alter the figure depending on various factors such as a higher target or a personal change. Remember, the idea is to reach a state where you don’t feel ‘burdened’ to make money.

Your Financial Independence Number will serve as your goal. Begin by understanding where you are at the moment in relation to this number. Therefore, all your actions would be directed at reaching this number.

Increase your savings every month.

If you set yourself to saving only 10% of your income each month, for the rest of your life, then you’d never be able to achieve financial freedom. Grant says that you must keep increasing your savings percentage. Ideally, save 1% more than the last month. So, if you are saving 10% in January, aim to save 11% or more in February and so on. Do this for at least the first year on your journey to Financial Independence. Never lose sight of your unique Financial Independence Number.

Once you start saving, you would reconsider all your expenses too. The idea is not to reduce all your expenses but to cut back in order to bring you closer to your number. Keep in mind that recurring expenses are the worst. They slow you down. If you can cancel those unnecessary monthly subscriptions then you’d reach your goal faster. When making such decisions, ask yourself if it is a ‘want’ or a ‘need’. If it is a ‘want’ then you should definitely consider giving it up, for the time being, to reach your number faster.

In parallel to saving, increase your primary career income. If you are working for someone, then you might as well make good money. You could learn to network, develop new skills, and get a promotion. Basically, you have to work towards getting ahead in your job in order to increase your income. If you increase your earnings, you’d automatically be able to save more. Don’t forget, your job has many benefits as a part of the compensation package. Getting reimbursements for transportation, paying a part of the student loan, other miscellaneous allowances, and many more. Know them and take full advantage. It will help you save more.

Learn to create multiple sources of income.

If you wish to reach your Financial Independence Number faster, then side hustle is a great way. Grant did many to reach his goal. He was a babysitter, boarded his neighbor’s cat, developed websites- all to get extra money. This contributed to his monthly earnings and enabled him to save more.

Grant recommends that you must lead a frugal life in order to save. However, he maintains that you should focus on increasing your income rather than decreasing your expenses. You must learn to have the right mix of both approaches to meet your goal.

Start investing your money.

Primary income and side hustles are great. But they are not enough! If you want to fast track your way to financial freedom, you must also invest. You can set aside the extra money from your side hustles for investment.

Grant points out a few things before you start investing. For example, you should pay off high-interest debt before investing. It’s best to get rid of it first. In case you have a low-interest debt, then you should not delay your investment plans. In this case, it is wise to consider the interest rate on your debts and the Expected Rate of Return (ERR) on your investments. If the ERR is higher, then you can go ahead and invest.

There are many ways to invest your money. You could consider options like stocks or savings accounts. While investing, do not forget to minimize your fees, irrespective of the investment mode. Grant has specific advice as far as investing in international equities goes. He says- invest only five percent of the portfolio in international equities for safety reasons.

Grant advocates investing in real estate. You could use money from the bank and invest in low interest. This is a form of leverage that brings higher returns later. The benefits of investing in real estate are many. For example, you’d get tax advantages in the form of tax deduction. This kind of investment is less volatile than the stock market. Hence, it is safer.

Choose your investment options carefully. Understand the model that works best for you. And, do not forget your Financial Independence Number.

Build a finance routine.

Financial freedom will take time. Anything that takes time requires patience and routine. Grant illustrates the importance of building a ‘finance routine’ to help you achieve financial independence. You can think of building a framework of habits. Habits that define how you manage your money and everything related to it. Review your credit card statements, check your credit score, invest an extra five dollars, or prepare for taxes- these are simple things that you must include in your routine. You should carve out daily, weekly, monthly, quarterly, and yearly tasks. Build a spreadsheet, put down the ‘to-do-list’ and do it.

Grant says that optimization comes with practice and a framework of habits to follow. Do not become complacent. Do not automate your finances. Manage your money yourself. Complacency won’t bring financial freedom, pushing the boundaries will.

Don’t burn yourself out. Live a little.

Don’t exhaust yourself on your way to financial freedom. When you are too focused on your goal, you tend to forget about the rest of your life.

You are thinking about maximizing your income. Side hustles are keeping you busy. You may also be giving up on your sleep. Do not do that. It could have a negative impact on your health and friendship. Try and maintain as much balance as you can without compromising on your goal. Take a break when you feel burnt out. You are more productive when you are well-rested.

Grant suggests getting the necessary rest, eating healthy, meditating, and going for walks. Always find time to chill and re-energize.

The Main Take-away

Financial freedom is possible. You don’t have to wait till 70 to live your life. If you plan to retire that late, you’d probably give the most valuable years to your employer. Don’t waste your time. Start early, it has its own advantages. Plan your journey to Financial Independence and get there as fast as possible.

About the Author

Grant Sabatier is the founder of the Financial Freedom Summit and the creator of Millennial Money. Grant guides on topics such as investing, personal finance, entrepreneurship, and mindfulness. It is his mission to make financial freedom accessible to all. He has featured in Money Magazine, the New York Times, Washington Post, and other publications.

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