Genre: Finance and self-development
Author: Grant Sabatier
30 Second Summary: You shouldn’t wait till the average age of retirement to start living the life you actually want to live. When you start leveraging your time and money, you can amass a significant amount of financial wealth a lot sooner than you think. The inverse is also true. When you do not leverage your time and money, your chances of an early retirement drastically reduce. The recommendations within this book have been followed by others and they achieved financial independence and increased personal autonomy; sometimes in as little as 5 years. While the steps within the book are already proven to work, many of the concepts are elementary and not groundbreaking.
Recommended read: Maybe. If you’re new to personal finance and to concepts like the time value of money (TVM), then yes, this would be a good read. However, if you’re not new to these concepts, you’d be better of reading something else.
There’s a couple of main concepts you should take away from this book. The list is not exhaustive and there are a lot more topics covered within the book. However, the topics listed below are what I found most valuable to individuals who are new to personal finance.
For many of us, we view the age of retirement to be within our 60’s. It’s an adopted cultural vision that many have been following blindly. Within our 60’s, we typically envision this as the point where we have accumulated enough financial wealth to stop working and live out the rest of our lives on our terms. However, Grant sounds the alarm to this train of thought and emphasizes that it is imperative we dissociate these two concepts. Instead, our goal should be to reach financial independence as soon as possible and he shows us a variety of ways to do so.
Reaching Financial Independence:
Luckily, unlike other financial wealth books, Grant goes the extra step and hits on the concept of increasing our income potential. While most books pound away at frugal spending and cost reduction, we’re informed that it’s okay to purchase things that bring us joy. We just need to remain cognizant that each purchase (that does not go towards our investments) compounds negatively towards our financial independence.
The point here is that making sacrifices and lifestyle changes are optional. Yet, when we decide to make these changes, we also dramatically reduce the time it would take to reach financial independence. The key is to make sure that the changes are reasonably sustainable.
Practical advice for saving:
When you first start saving, try to start small and work your way up to around 20% of your total income. The more you increase investments, the less time it will take for you to reach financial independence.
Unfortunately, many of us increase our lifestyle expenses as we progress through our professional careers. Grant warns us to watch out for this lifestyle inflation! If you get a raise or come across additional income streams, put that towards your investments. Try to keep or reduce your lifestyle expenses, not increase them.
Employee Retirement Options
Always match your employer's retirement contribution - it’s free money!
If you’re not self-employed, ask your employer for a raise. When you do ask for a raise, make sure you do your research. If they decline, it might be in your best interest to seek new opportunities.
If you’re self-employed, you can open up your own retirement plan.
Grant suggests that we shouldn’t solely rely on our job for money. This is when we’re introduced to the concept of side hustling and how we can monetize our hobbies and/or skillsets. Be creative when looking for ways to supplement your income.
Other more technical concepts covered within this book:
Tax saving strategies
Investment options (Traditional IRA’s, Roth IRA’s, common stocks, ETF’s, etc.)
Portfolio structure and balancing
Financial tools to help establish investment goals
Real estate investing
The Time Value of Money
In summary, if you’re new to personal finance and want to learn how to live a richer life, give Financial Freedom Book a read.