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

Author & Background: Grant Sabatier is an entrepreneur with a B.S. in Philosophy from the University of Chicago. Finding himself destitute, he engaged in various “side hustles,” and financial strategies to reach $1 million in assets before he was thirty-years-old.

Published: 2019

Length: Medium, 250-300 pages

Genre: Personal Finance

How to Access: Penn State Libraries provides access to physical and digital copies of Financial Freedom, here. I highly recommend Adobe Digital Editions (available free from Penn State) to read online.

Reconsidering Retirement, and How You Can Get There

The central focus of Grant Sabatier’s personal finance book, Financial Freedom: A Proven Path to All the Money You Will Ever Need, is that retirement is much easier to achieve than most people believe. Sabatier offers several very effective techniques to reach the “financial freedom” of no longer having to work by having your assets provide you enough income to live the life you want. Sabatier gets into incredibly specific details in many areas and outlines wealth maximization in passive income, current employment, and tax efficiency. This book is very easy to follow, but people with intermediate knowledge of personal finance may feel bored at times. Additionally, I found Financial Freedom to be very motivational, despite not directly trying to be.

Sabatier offers insightful advice for any aspect of life, but the primary objective is to not have to depend on a job for an income. I believe this book can be broken down into three main areas that are the most important: yourself, your lifestyle, and your financial abilities. I will not get too specific in some areas because Sabatier also runs www.millennialmoney.com which offers specific advice and even goes into different topics that are useful to students, such as student loans, jobs while earning a degree, and much more.

 

Understanding Yourself and Your Goal

One of the greatest takeaways from Financial Freedom is self-realization. There are many realization techniques throughout this book that I found to be incredibly helpful; however, the central one that Sabatier suggests to guide your lifestyle feels somewhat abstract. Sabatier advises to choose “your number,” which is the amount of money you would like to have to pay off whatever you want to do in your life. This book focuses on attempting to reach this number. I found this to be difficult to predict if you do not have exact future goals, but having a number in mind like $2 million or $3 million helps to illustrate examples. Nonetheless, using guidance to reach this number is helpful anyway.

Two awesome key points that can really apply to any part of life is Sabatier’s recommendation to not follow conventional wisdom, and to go against the grain. Just because people are not doing something does not mean that it is not valuable. This theme goes especially well with Sabatier’s suggestion to avoid “lifestyle inflation,” which is when someone earns more and then spends much more, leaving little behind for investment. Just because people are suggesting spending 35% of your income on rent, does not mean that you should do the same as well.

In recognizing yourself, Sabatier also provides a very valuable interpretation of the time value of money. TVM can be found on the millennialmoney website for further details, but Sabatier applies it directly to everyday purchases so people can truly realize what they are spending day-to-day. For example, spending $100 a month on coffee can significantly affect your long-term wealth. Likewise, having a recurring income stream of $100 can significantly benefit you.

This occurs because if someone has an investment portfolio, they can typically withdraw 4% per year. Over a lifetime that $100 can be impactful: $100 monthly expense X 12 months X 25 (100/4% withdrawal rate) = $30,000 lifetime decrease on total wealth, or a $30,000 increase if it is an income source. Sabatier also relates this to the value of an individual’s time specifically. Someone who makes $40/hr will sacrifice a whopping 75 hours for a recurring coffee expense.

Lifestyle Choices to Get There

Reaching a goal of a million or more, of course, requires great sacrifice, and what I really like about this book, is that Sabatier is willing to say that you need to make changes, sometimes dramatic to your lifestyle to reach your goal faster. While he does say that you shouldn’t sacrifice going to the movies with friends to save money, he does say you should be more productive with your time. There are a few contradictions that are not completely reconciled. For example, Sabatier rightfully points out that people spend the most on housing and transportation, so cutting on entertainment will not make you much poorer, but he also recommends spending a lot of time preparing side hustles and working, which takes up time and would prevent someone from having the time to spend on entertainment.

A major focus of this book is the concept of “side-hustling,” which is finding supplemental income streams to your normal work. I really like his emphasis on this goal, and I feel it is very easy to apply for most people. He recommends creating a list of things that you like and things that you are good at to find a side-hustle that can make you money. He cites examples of dog-walking, landscaping, web design, and others.

Sabatier has another major focuses on budgeting, which I found to be less useful. His expression, “Time is limited, but money is not,” definitely rings true, but some of the more specific advice on budgeting falls short. Sabatier offers many questions for potential consumers to consider before buying something, such as “Will this make me happy for longer than x amount of time,” etc. I believe these would be helpful for someone who spends a lot, but for others it seemed somewhat obvious.

Financial Choices to Get There

Aside from insightful advice on lifestyles, the technical financial advice of this book is probably its strongest point. Sabatier goes into depth on various tax-efficiency techniques and compensation maximization from employers. I found the information incredibly easy to follow, and will be referencing it again upon graduation.

I will not go into specific detail because it is extensively listed and explained in the book and website, but Sabatier suggests which investment vehicles to invest in for certain lifestyles and in what order. He reflects on all investment vehicles that are available, including Roth IRA’s, Traditional IRA’s, 529 accounts, and personal investment vehicles through brokerages, such as Vanguard or Fidelity. He emphasizes a key point that a lot of these tax vehicles change over time, and that is important to follow their benefits.

In addition to security-based assets (stocks and bonds), Sabatier provides ample direction for real estate investing, as well. Real Estate is great for personal expenses because rental income is much easier to access than stock-market gains. Sabatier highly recommends being diversified in both Real Estate and stocks, and outlines strategies for what type of real estate would be best for you. Sabatier describes the fundamental 1% rule of making sure that monthly income equates to 1% of acquisition cost for a real estate investment.

Wrap-Up

I found Financial Freedom to be a very helpful personal finance and lifestyle book that especially excels in direct financial strategies that I recommend new graduates to consult when starting their first full-time jobs. Financial Freedom sometimes fell victim to its own rules, when Sabatier contradicted himself. His expression of not believing everything you are told was sometimes invalidated when he suggested certain things like maintaining minimal international exposure in the stock market or arbitrarily choosing to review portfolio asset allocation every 3 months without justification.

Overall, Sabatier emphasizes realization of your lifestyle and your finances, and offers direct strategies to achieve whatever your goal may be. From reading this book, I really felt motivated to improve my financial status and deeply consider the reasoning behind my financial choices. I believe there is at least something for everyone to find in this book.