Learning From Literature

Financial Freedom by Grant Sabatier

Cover of Financial Freedom by Grant Sabatier

Financial Freedom: A Proven Path To All The Money You Will Ever Need by Grant Sabatier is a personal finance book published in 2019.

One morning, Grant Sabatier woke up in his parent’s house at age 24. He got on his phone and checked his bank account… which had $2.26 left in it. That day, Sabatier committed to not spending his time in a job he hated only to get by — he wanted to love life. Five years later, Sabatier reached financial independence with over $1.25 million saved. 

Financial Freedom contains the exact framework that can help you reach the same level of success. Strategies within require effort and discipline but are simple to understand. Sabatier learned everything he could about personal finance, entrepreneurship, and investing — 3 things even someone with $2.26 in the bank can learn.

Sabatier also started millennialmoney.com, which over the past three years (at the time of publishing), had over 10 million people visit the website or listen to his podcast.

Purchase the book by clicking this link!

Enjoy!

Table of Contents

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Money Is Freedom
  • If you want something different, you have to do something different
    • If you want to retire early, you can’t live like the people planning to work 40+ years
  • Saving money is about creating the life you love
    • Financial freedom means different things to different people
  • Seven Levels of Financial Freedom
    • Clarity → figure out where you are + where you want to go
    • Self-Sufficiency → earn enough money to cover expenses on your own
    • Breathing Room → stop living paycheck to paycheck
    • Stability → six months of living expenses saved + bad debt repaid
    • Flexibility → at least two years of living expenses invested
    • Financial Independence → can live off investment income forever (work becomes optional)
    • Abundant Wealth → have more money than you’ll ever need

7 Step Plan:

  1. Figure Out Your Number (to reach financial freedom)
  2. Calculate Where You Are Today
  3. Radically Shift How You Think Of Money
  4. Stop Budgeting + Focus On What Has The Biggest Impact On Your Savings
  5. Optimize Your 9-to-5
  6. Start A Profitable Side Hustle + Diversify Income Streams
  7. Invest As Much Money As Early And Often As You Can
Time Is More Valuable Than Money
  • Financial Freedom = ability to do whatever you want with your time (even if that means keep working at the same job)
    • Think about what you are working towards, don’t live on autopilot
  • The most difficult part → ignoring others’ opinions
  • Don’t accept the traditional view of life + throw your dreams into the future
    • Top 2 regrets of the dying → “I wish I’d had the courage to live a life true to myself, not the life others expected of me” + “I wish I hadn’t worked so hard”
  • Key to fast-track financial freedom → invest as much money as early + frequently as possible
    • Every dollar invested today is worth hours / days of your freedom in the future
    • Start earlier + save more → reach freedom exponentially faster
What Is Your Number?
  • Beware Lifestyle Inflation — the tendency to spend more as we make more
    • Think about what you truly value 
    • Are those purchases worth trading hours / days of future work for?
    • In Smart Couples Finish Rich, David Bach describes a “value planning” method to explicitly define the role of money in your life
  • The amount you need depends on the life you want to live
    • What does a perfect day look like to you? 
    • It will change – set a realistic goal and adjust over time
  • Your Number Needed (in income-generating investments) = At least 25x expected annual expenses
    • Ex — $50,000 annual expenses x 25 = $1.25 million
  • Side income when financially free can have huge benefits
    • Don’t need to withdraw as much investment money so it compounds faster
    • Hedge against investment performance
  • Break your number down into more attainable savings goals
Where Are You Now?
  • Pay down debt in a way that allows you to save + invest as much as possible
    • Ex — stock market return = 7%, credit card debt = 22% → pay credit card debt off
    • Ex — stock market return = 7%, other long-term debt = 3.5% → make minimum payments and invest the difference
  • Don’t Get Emotional With Money
Next-Level Money
  • Building wealth relies on 3 basic levers:
    • Income
    • Savings
    • Expenses
  • Savings Rate
    • Determines time to retirement
    • Someone with a $50,000 salary can retire just as fast as someone with a $500,000 salary, as shown in Retire Before Mom And Dad
  • Enterprise Mindset
    • Daily habits = riches
    • It is a lifestyle, not a single action
    • Take advantage of every legal opportunity to build wealth
Is It Worth It?
  • Calculate Your Real Hourly Rate
    • Include time getting ready, commuting, destressing, and anything else you wouldn’t have to do if it wasn’t for your job
  • Before Buying:
    • How happy will this purchase make me?
    • How much money do I have to make to afford this? (think of taxes)
      • $3 when you pay 25% tax? → $4 true cost
    • How many hours of my life am I trading?
      • Price / Real Hourly Rate = Hours Traded
    • Can I get similar for less?
    • How much am I spending on convenience? (food convenience is largest markup)
    • How much will this money be worth in the future?
      • Today’s purchase sacrifices the opportunity to grow that money for your future
    • How much time is it costing me in the future?
The Only Budget You’ll Ever Need
  • You don’t have to budget
    • Focus on your 3 biggest expenses — housing / transportation / food (First To A Million uses the same strategy)
  • Housing
    • Move to a cheaper home
    • Rent out extra rooms
    • House Hack (also explained in First To A Million)
    • At age 24, Adam bought a Chicago apartment building and covered the mortgage plus an extra $2,500 per month by renting out units
    • Anita made $175,000 per year as a lawyer but chose to live with roommates and spend $750 per month on housing. She retired at age 33
  • Transportation
    • Walk / bike whenever possible
    • Only buy used cars (if you even need one!)
  • Food
    • Grow your own
    • Cook at home
  • Travel
Optimize Your 9-To-5
  • Maximize your benefits
    • HSA, 401(k), continued-learning, insurance, remote work, etc.
  • Maximize your salary
    • Research your current market value, value to your company, and any competing offers of employment you’ve received
    • Ask for a raise that represents your true value
More Money In Less Time
  • Diversify income streams by developing side hustles
    • Side hustle = money-making ventures other than your full-time job
    • At age 25, Matt makes $55,000 a year as a graphic designer… and also collects $200,000 a year from his dog walking company he launched while a college student
    • Aim for passive-income side hustles
  • When?
    • Mornings
    • Evenings
    • Weekends
    • Vacations / “sick” days
    • In-between moments
  • Side Hustle Evaluation Framework
    • Analyze passions + skills
      • Can you get paid for any of them? Could you launch a course teaching them? Could you sell it locally?
    • Evaluate money-making potential
    • Figure out what to charge, get your first sale, and get paid as much as possible
    • Build it to fit into your ideal lifestyle
The Seven-Step Fast-Track Investment Strategy
  • Investing = ultimate form of passive income (exchanging almost 0 time for money!)
  • 5 Key Concepts
    • Minimize risk
    • Minimize fees
    • Minimize taxes on your contributions
    • Maximize returns
    • Minimize taxes on your withdrawals
  • 1 — separate short-term + long-term goals
    • Invest differently depending on time frame
    • Long Term (5+ years) → stocks + bonds
    • Short Term (< 5 years) → cash, CDs, bonds
  • 2 — figure out how much you have to invest
    • Determine the number you will invest every week / month without fail
  • 3 — determine target asset allocation
    • Determines risk / reward levels
    • Sooner you need the money → more conservative
  • 4 — evaluate current fees + try to keep them as low as possible
  • 5 — pick the right investments (index funds recommended)
  • 6 — max out tax-advantaged accounts
  • 7 — invest in taxable accounts
Real Estate Investing
  • Consistent monthly cash flow + appreciation + tax advantages
  • Leverage
    • 10% growth of $100 in stocks → $10 gain off $100
    • 10% growth of $100 in real estate w/ $20 down payment → $10 gain off $20
  • Tips To Find Investment Property
    • Develop criteria to follow
    • Set a budget + get credit preapproved
    • Look for immediate positive-cashflow properties w/ appreciation potential
    • Use an amazing realtor 
    • Hunt when everyone else isn’t
    • Look for foreclosures / short sales
    • Get familiar with the area
    • Find an experienced home inspector
    • Be prepared to walk away from a deal
More Than Enough
  • Withdrawal Strategy @ Retirement
    • Live off side / passive income as long as you can
    • Maximize tax deductions
    • Withdraw from taxable accounts first
  • Have enough interests to keep you busy
    • Retire to something, like a passion project, worldwide travel, or something else you’ve always wanted to do
The Future-Optimization Framework
  • Just get started
    • Strategies are worthless without application
  • Learn to say no + Focus on the goal
    • It’s never been easier to waste time with modern gadgets
  • Execute consistently
    • Strategies will get you wealthy for sure if you stick with them, it is not an overnight thing
  • Life > Money
    • Sometimes you need a break – Take a step back to go farther forward
Living A Richer Life
  • Success = peace, not money
    • Measure success by how peaceful your life is
    • Money only matters in how it helps you live a life you love
  • With each level of financial freedom you feel more in control – more time, space, and freedom

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