Key Messages
How To Achieve Financial Freedom: The Millennial’s Guide To Becoming Wealthy
Financial freedom means being able to generate enough wealth to free yourself from work, long before retirement age.
With this goal in mind, Grant Sabatier decided to develop a financial strategy that could help him achieve it.
In just five years, his carefully crafted plan allowed him to break away from the need of ever working again!
He achieved his goal without having to take risks or get lucky by relying on an inheritance.
These sections detail Grant’s journey and provide an insight into the strategies he used to become financially independent.
You’ll also gain valuable insight on what Einstein believed was “the eighth wonder of the world” when it comes to creating wealth, why budgets don’t really matter, and how one internet-savvy man made $5 dog-walks transform into a million dollar lifestyle.
Grant Sabatier Showed Us How To Reach Financial Freedom By Defying Social Norms
In August 2010, Grant Sabatier was unemployed and living with his parents.
He realized the average income for his generation was less than half of what it was for his parents and factoring in inflation, it made saving money almost impossible.
Even if he followed the nine-to-five working life, he wasn’t guaranteed to retire comfortably – that is when Grant had a lightbulb moment: to reach financial freedom he had to defy social norms.
He set himself an outlandish goal which was to save $1,250,000 to be able to retire as soon as possible and live his ideal life without relying on traditional nine-to-five jobs.
To achieve this goal, Grant had to take new perceptions about money – viewing it not something finite but something he could use to generate more wealth – and seek education on finance strategies while also launching side businesses and investing in stocks.
With dedication and hard work, in five years time he went from nothing at all in savings to having over a million dollars worth of wealth!
Grant’s story is inspiring but reminder of how important it is for everyone who wants financial freedom – defy social norms by following financial paths that are unconventional yet still proven effective!
Calculating Your Savings Target: Use Compounding To Unlock Financial Freedom
When it comes to financial freedom, the first step is to accurately calculate how much money you spend annually.
To do this, start by looking at your current expenditures – like rent or mortgage payments, taxes, utilities, insurance and other cost of living expenses.
Then factor in any future plans you have – such as having kids, upsizing your home or relocating to a more expensive area.
After that, it’s time to break out the calculator so you can figure out how much money you need for long-term security.
The best way to do this is by dividing your annual living expenses by 4 percent.
This figure represents your principal – or the amount of money you’ll need for investments so that you can live comfortably off the compound interest generated from them.
By using compounding at 4 percent rather than 7 percent interest rate for withdrawals ensures that there will be no touching of the principal – which means that it has enough time to provide an income stream from on its own if necessary.
Understanding Your Net Worth: The Starting Point For Financial Independence
Before you can begin setting a plan into motion to gain financial freedom, you must understand your current financial situation.
Knowing where you stand financially is the starting point for this journey, and it all starts with calculating your net worth.
Your net worth is simply the sum of your assets minus any liabilities.
This is an important metric when considering your financial situation as it will help guide your financial strategy and act as a reference point when developing a savings target.
Determining your net worth starts with accounting for all of your assets – anything of value that you own, such as money in bank accounts or pension funds, real estate, cars and jewelry – and their estimated sale prices if they were sold.
Then add up the total of those amounts.
That figure represents your assets.
How To Trade Hours For Dollars To Reach Financial Freedom
When it comes to financial freedom, it’s important to understand the true cost of your purchases.
The ticket price tells you one story, but you have to look at the bigger picture – namely, how many hours of your life you’ll have to work in order to buy that item.
Think about it this way: a $3 coffee may not seem like much, but when you factor in taxes, you’re actually spending $4 pre-tax.
That means that for every item you purchase, you need to think about what the true cost is and how much of your life will be ‘traded’ for that item.
When making financial decisions, try calculating your hourly rate first.
Your income alone won’t tell the whole story; after all, you still need to factor in things such as commuting time and other activities related to your job which aren’t payed for but incurs your time nonetheless.
Once this is done, it gives you a reference point from which to evaluate whether an item or service is worth it or not.
A shift in mindset towards seeing items in terms of hours of their life will help reduce impulse or emotional buying and make wiser decisions when money is concerned.
Don’t forget that money can alternatively be directed toward investments which will give returns over time -a practice essential towards achieving financial freedom.
How To Maximize Your Savings By Targeting The Big Three Expenses
Cutting back on your housing, transport and food costs can be a great way to significantly increase your savings.
The average American household spends 60 percent of their income on these three main areas, and if this could be cut to just 30 percent, an extra $17,500 per year would be available for investing.
Over a twenty-year investment period, this amount could grow to an astonishing $835,000.
Start by down-sizing or moving to more affordable neighborhoods for a set period of time – this could boost your savings significantly.
Additionally, opt for public transport or car-sharing options instead of owning a car – you’ll save money on the purchase price or loan payments as well as gas, maintenance and insurance.
And when it comes to food costs, look out for online retailers that offer discounts for repeat orders and explore promotional deals when eating out.
These tactics may not always be easy or convenient but they can help you accumulate wealth over the long run so it’s worth making some sacrifices in order to get there.
So remember: cutting back on housing, transport and food costs will significantly increase your savings!
Maximize Your Paycheck To Achieve Financial Freedom: Three Simple Steps
If you want to reach financial independence sooner, then proactively look for ways to make your nine-to-five paycheck work harder for you.
The first place that you should start is looking into the pension fund your workplace may offer.
It’s likely that there will be a free matching contribution from your employer up to a certain amount.
Not only is this free money, but when added to your pension fund, it can reduce your taxable income and also contribute towards savings goals.
The second way of making your nine-to-five pay check work harder for you is through asking for a raise.
Investigate the salaries other companies in equivalent roles are paying and consider what additional responsibilities or contributions that you’ve made where it may warrant an increase in salary.
Presenting it as a percentage will be more palatable than an absolute dollar figure!
And the third way of optimizing your paycheck is through remote working arrangements.
This gives greater flexibility (and potentially better work/life balance) whilst saving on commuting time and costs.
Studies have also shown that employees working remotely three-to-four days per week yield higher engagement levels which benefit both employee and employer alike.
These are three great ways of optimizing your nine-to five paycheck so that success with reaching financial independence happens sooner rather than later!
Make Financial Freedom Possible By Starting A Side Business
Diversifying your income with a side business is one of the fastest ways to financial freedom.
By opening up another source of revenue, you can create multiple streams of income.
Just look at Matt – in just three years he went from charging just $5 per dog walk to having a business that generates him over $200,000 a year.
This extra money has allowed Matt to save up over $1.5 million by his 30th birthday!
The key to success when it comes to diversifying your income with a side business is finding something that speaks to your interests and skillset.
You’ll be more likely to stick with it and ensure its success if you enjoy it – this way, you won’t be burning out.
To maximize profits, invest all the money you make from your side hustle into your investment account so you can accumulate compound interest over time.
It’s also essential that you do thorough research and understand the competition before setting up shop – while no competition could mean there’s no demand for the product or service, it could also mean you’ve stumbled upon an incredible idea!
And no matter what, always remember to keep start-up costs low so potential losses are minimized.
Good luck on the journey towards financial freedom!
The Key To Achieving Financial Freedom: Commitment And Determination
Grant’s journey to financial freedom started with him understanding that he had to do something different.
This isn’t easy though as it means having to go against the advice given by family and friends, as they are likely to doubt you in your new found venture.
But, no matter how daunting this might be, Grant was brave enough to jump in and start taking action on his plans.
One of the main points that he makes is that even the best financial strategy only works if you make an effort to put it into practice.
Doing nothing won’t get you anywhere – the key is to take action.
Definitely make use of those HR matching schemes, open up a compounding investment account (even if it’s just a small amount) or take some time out to plan and mind map business ideas.
It may inarguably be a lazy day filled with boozy lunches with friends but getting started requires sacrifices from time-to-time which can then lead to reaping benefits for years ahead once the goal of financial freedom is achieved.
Grant managed it in five years but this could take more or less depending on various factors such as net worth and other investments.
Wrap Up
The financial freedom book offers many actionable pieces of advice to help readers gain control over their money and plan for their financial future.
One of the key takeaways in the book is that having enough money saved up isn’t enough – you need to use your finances smartly and make wise investments to ensure ongoing financial security.
One of the recommended actions is to set up a small group of people, a family member or friends, and make sure to meet monthly to discuss financial strategy.
During these meetings, it’s possible for members of this group to share notes and stay on track so that they can reach their goals.
By following the advice in this book and taking actionable steps such as setting up a regular hangout for discussing finances, readers can experience lasting change towards financial freedom.
