Learning From Literature

First to a Million by Dan Sheeks

Cover of First to a Million by Dan Sheeks

First to a Million: A Teenager’s Guide to Achieving Early Financial Independence by Dan Sheeks is a personal finance book published in 2021.

Since financial literacy is not taught in school, many believe the only available path is to work until you are old, then retire. Sheeks introduces another option; spend your years doing what is most important to you (like traveling, spending time with your family, or bettering the world) instead of waiting until you retire at age 65. Becoming financially independent does not mean you have to stop working, but it means you have control over your most valuable asset: your TIME.

In the book, Dan Sheeks explains how to achieve financial independence, even at a young age (think able to retire by 25). While tailored to younger adults, this book is helpful for people of all ages.

Purchase the book by clicking this link!

Enjoy!

Table of Contents

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The Standard Path And A Different Option 

Why Financial Independence?
  • Financial Independence = Total Time Freedom
    • You no longer have to work or depend on a job
    • You regain control over your time and choose how to spend it
  • FI lets you live with intention—time becomes yours again
Jobs
  • The Reality of Work Hours & Pay
    • Jobs often take over your life
    • Average US worker: 49 hours/week (higher for younger workers)
    • Salary breakdown (50k, 49 weeks):
      • 40 hours/week = $25.51/hr
      • 60 hours/week = $17.01/hr
  • FI = All the benefits of a job are available to you, and more, once you reach financial independence
    • Social Interaction
    • Financial Security
    • Time Off
    • Learning Opportunities
Financial Independence Equation

Passive Income + Sustainable Asset Withdrawal > Living Expenses 

  • Passive Income – income you earn without working
  • Sustainable Asset Withdrawal – can make regular withdrawals for a given period of time without depleting the asset
4 Mechanisms of FI
  1. Earn more
  2. Spend less
  3. Save the difference
  4. Invest wisely

The FI Foundation

Happiness
  • Top 10 Things That Make You Happy
    • Most things likely cost time, not money
    • FI gives you the freedom to have both
  • Ask Yourself:
    • What do you see yourself doing in 15 years?
    • If you could do anything, what would you do?
    • FI lets both answers align
  • Define what happiness looks like in your life
The Concept of Enough
  • More Money Doesn’t Always Mean More Happiness
    • At some point, buying more decreases happiness
    • Focus on the things in your “Top 10 Happiness List”
  • Seminar attendees from all income levels ranked their happiness similarly
    • Everyone said they needed about 50% more income to be happy
    • Shows that higher income doesn’t equate to higher happiness
Your Why
  • Know Your “Why” to Stay Motivated
    • Lower-Level Why’s: Time-related motivations like freedom to travel, spend time with family, or explore opportunities
    • Higher-Level Why’s: Less self-focused goals such as mentoring, starting a nonprofit, or volunteering
Why Doesn’t Everyone Do It?
  • To reach FI at an early age, you need:

“I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. Twenty-six times I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”

Michael Jordan

The Keys To FI

“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.”

– Albert Einstein
  • Understanding basic finance is essential for financial independence
  • The Compounding Effect
    • Compound interest grows your money over time, earning more without extra effort
  • Real vs Fake Assets
    • Real Assets: Generate income or increase wealth (e.g., stocks, rental properties)
    • Fake Assets: Depreciate and decrease net worth (e.g., cars, clothes)
  • Good vs Bad Debt
    • Bad Debt: For fake assets (e.g., car loans)
    • Good Debt: For real assets (e.g., investment properties)
  • Credit Score
    • Ranges 300-850, key for loans, housing, and insurance
    • Calculated from payment history, amount owed, credit types (720+ is excellent)
    • Never overspend on credit cards, always pay on time
  • Income vs Wealth
    • Income is what you earn, wealth is what you keep
    • High income doesn’t guarantee financial security
  • Passive Income
    • Money earned without active work (e.g., dividends, rental income)

How to Pursue FI: Earning and Spending 

  • Earn More
    • Manage your time better to earn more
    • “Next-Level” Jobs: Jobs that expose you to investing (assistant to real estate agent, mentor)
    • Must be passionate about side hustles to stay motivated
  • Spend Less
    • Spend on what you value, not to impress others
    • Focus on saving in the “Big 3” expenses:
      • Housing
      • Transport
      • Food

How to Pursue FI: Save and Invest 

Save the difference
  • Many spend all they earn, but income is not guaranteed forever
    • Avoid Keeping Up with Friends: There will always be someone ahead of you
    • Prioritize saving BEFORE paying necessities or buying wants
  • 3 Savings Accounts:
  • Savings Rate Formula:
    • (Money Earned – Money Spent) = Money Saved
    • Money Saved / Money Earned = Savings Rate
    • Professionals recommend AT LEAST 10%
    • You can have a rate of 50%+ with strategies like house hacking and avoiding fake assets
Invest Wisely
  • Investing = buying assets expecting future income or appreciation
    • FI Equation: Passive income + Sustainable Asset Withdrawal > Living Expenses
    • Investing’s Goal: Increase passive income and savings for withdrawals
  • Warren Buffet’s Advice
    • “Know what you know and don’t know”
    • “Don’t invest in what you don’t understand”
    • Avoid being a “know nothing” investor who thinks they know something
  • Index Funds: Long-term strategy; avoid trying to time the market
    • Over 85% of active traders underperform the market
    • Volatility is normal, and it’s a fee for long-term gains (Morgan Housel)
    • 4% Rule: Withdraw 4% annually without depleting assets
  • Real Estate: Build passive income through rental properties
    • Requirements: Income history, credit score, learning, savings for down payment
    • Pros: Cash flow, appreciation, tax benefits, control, leverage
    • Cons: Market downturns, lack of liquidity, not 100% passive, tenant/contractor reliance

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