Last fall, I traveled to Washington, D.C. for a conference full of. . . money nerds like me. There was a huge amount of great information shared, I met some wonderful people, and I discovered a few gems. One of those gems was the book Financial Freedom*, written by Grant Sabatier.
This book was not on my radar prior to the conference, but I heard Grant give a terrific presentation about book publishing, and later had the chance to meet him in person. I had known of Grant as someone connected to the FIRE movement (Financial Independence, Retire Early), and it was a pleasure getting to know more about his background and life.
In his book, Grant shares what you might call his “rags to riches” tale, and it’s a compelling story! But this is not a “get rich quick” sort of book: Grant worked hard and made sacrifices to build his savings to over a million dollars in a very short number of years. The book details how he did it, and he lays out a clear roadmap for others to follow in his footsteps.
Here are the things I liked about this book:
His emphasis on time being more important than money
Absolutely, time is more valuable than money, and I think it is easy to forget that. Money and time are usually a trade-off: if you want more money, you have to spend more time to get it. If you want more time, you might have to spend money to get it (e.g. paying for help to free up time) or sacrifice money to get it (e.g. working fewer hours, thus making less).
Grant’s whole argument is based on this premise of time being more important. Achieving financial freedom is the way you can call ALL the shots on how you spend your time. Grant decided he would work hard and make sacrifices for a few years in order to build a portfolio that would then provide financial independence for him indefinitely. A worthy goal, in my opinion.
Like many of the folks active in the FIRE community, Grant is financially independent, but not exactly retired. Like me, he enjoys working and creating and contributing to the world in a meaningful way and doesn’t see himself retiring in the traditional sense. But the point is that he COULD be retired. That is what financial independence is all about.
He also makes the point very clearly that time is critical when it comes to having the best success with your portfolio. The “magic” of compound interest is even more astounding when it has two or three times the amount of time in which to grow your assets. The earlier you can get your money invested and working for you, the better. (If you didn’t start early, don’t despair, start NOW!)
His expansion of the YMOYL philosophy
Like me, Grant is a fan of Vicki Robin and her book, Your Money or Your Life (YMOYL). In his book, Grant outlines some of the key concepts of YMOYL, and then expands on them in a thoughtful way. Part of the YMOYL process is to calculate your real hourly rate, and then determine how many hours of your life you are spending when you make a purchase. Thinking about money this way is powerful, and it brings needed mindfulness to the process.
Financial Freedom takes this core concept and develops it further, adding additional questions to ask yourself before you make a purchase. One noteworthy question is to ask, “What will this cost me each year for the rest of my life?” We too often make purchases by only evaluating the purchase price, without regard for the carrying cost of the item. Cars are a great example. What you pay for a car initially is only one consideration. What will that car cost in gasoline, insurance, taxes, and maintenance going forward? Examining the total cost of ownership is a much more thorough way to assess a prospective purchase.
He’s a math nerd!
As a fellow math nerd, I appreciated all the detailed charts that Grant provided to illustrate his many points. It’s easy to explain, for example, how compound interest has the power to grow your money over time. What’s better, though, is to show a year-by-year chart of that growth. There are numerous helpful charts in the book that illustrate the arguments he makes, such as “every little bit helps,” and he clearly identifies the impact of accelerating your efforts by saving more of your income.
Even those who aren’t fans of math can understand his calculations, and more importantly, the logic behind them. So, don’t be scared off at the prospect of lots of math and graphs – there’s great stuff in there!
His focus on saving, and making, more money
Many personal finance books focus on debt pay-off and cutting expenses as a way to get ahead financially. While those are truly important aspects of building wealth, oftentimes the other side of the equation, increasing your income, gets shortchanged. I’ve written about it myself, and I was pleased to see this as a focus of Grant’s book.
Grant gives particular attention to stock market and real estate investing as ways to passively grow your assets, but he also details the importance of developing skills to add to your income via side hustles. In the current economic situation, I think it is more important than ever to be nimble in your marketable skills. This skill flexibility can be developed through the use of side gigs, and of course, additional work can bring in additional income to help you meet your savings goals.
His use of realistic assumptions
In general, I have always thought Dave Ramsey does a good job of covering the basics of personal finance. One area I strongly disagree with him, however, is his consistent use of overly optimistic assumptions about how much your portfolio can earn. Thankfully, in Grant’s Financial Freedom, the assumptions used for rate of return and inflation are quite realistic and in line with historical outcomes.
His suggestions for optimization
Throughout the book, Grant encourages readers to experiment with strategies and modify them to fit your own situation. While he presents the blueprint for how he has become financially independent, he acknowledges that everyone’s situation is different. The idea of testing out strategies, whether it be money-saving ideas or investing, is a good one. Many people will gravitate toward strategies that might sound awesome, but in practice are not workable for them. Experimentation is so key! Trying things out and learning will take you farther down the path to success, even if all the strategies you attempt don’t pan out.
As you might have gleaned, I’m a pretty big fan of this book. While it isn’t a completely thorough primer on all areas of financial planning, it is an excellent how-to book on making more income, investing, and creating passive income.
My only criticism, and it is a slight one, is that inexperienced investors might be tempted to take more risk than is wise for their situation based on reading this book. Grant warns repeatedly and clearly about risk tolerance, and he admits he has a high tolerance for risk. It was good to see that he acknowledges the higher-risk strategies he is promoting, but even with that warning, I would suggest that readers uncertain about their own risk tolerance seek some professional advice before engaging in riskier investment strategies.
Just to be clear, his strategies are generally not speculative in nature (i.e. super risky). Investing primarily in the stock market and in real estate is by nature on the higher end of the risk spectrum, but clearly there are far more risky strategies out there. His stock market investing suggestion is to use index funds for diversification, and that is definitely less risky than trying to pick individual stocks over time. There are no futures or bitcoin trading recommendations here – his advice for how to invest in stocks (via index funds) is solid.
To summarize, I think his strategies are spot on for people in their 20s and 30s, and even folks in their 40s could benefit by being more aggressive with investments. It is the 50-year-olds and up that should do a bit more homework before committing to strategies in this book. Over longer periods of time, it’s hard (maybe impossible?) to beat the stock market for the best returns in your portfolio. But as you approach your target retirement (or financial independence) date, it bears a bit closer examination due to the volatile nature of the stock market.**
Alrighty, that wraps up my review of Grant Sabatier’s Financial Freedom. Have you read it? Have you incorporated the method into your financial life? Let me know what you thought of it! Share below! Or if you want to start a discussion with some like-minded friends, join the free SimpleMoney Community on Facebook to share your thoughts!
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P.S.S. Psst. . . Hey, here’s something new and exciting! I will be attending the Financial Freedom Summit in St. Louis, Missouri in May 2020. This event was developed by Grant Sabatier and will feature loads of speakers on various financial topics. This is not only for financial professionals – it is geared for ANYONE interested in personal finance and achieving financial freedom. I’d love to meet you in St. Louis! If you sign up via this link, I’ll receive an affiliate commission.
Want more information about Financial Freedom? There is a free live presentation next week, hosted by Grant Sabatier. For more information, check out: 7 Steps to Financial Freedom in 2020. It will be held Tuesday, January 21, 2020 at 8p.m. EST
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**And of course, I’d be remiss in not pointing out that past performance is no guarantee of future performance.