Broke to Saving $1 Million in 5 Years: Achieving Financial Freedom with Grant Sabatier

Summary

In this insightful conversation, Grant Sabatier shares his personal finance journey from having no clear direction in his early 20s to achieving financial independence. He discusses the importance of viewing money as a tool for freedom, the psychological aspects of wealth, and strategies for managing finances. Grant emphasizes the value of simplicity in financial planning, the impact of climate change on investments, and the need for adaptability in an uncertain future. He also shares his experiences with money mindset shifts as his net worth grew and offers advice on building resilience and making the most of the current opportunities.

Takeaways

• 🌟 Money mindset is crucial, and scarcity or abundance mentality can significantly impact one's financial journey.
• 💡 Personal finance is often misunderstood, with many outdated or scammy pieces of advice available.
• 📚 Financial education, through books and resources, can be life-changing and shift one's perspective on money.
• 🚀 Entrepreneurship and side hustles can lead to financial success and independence.
• 🧠 The psychological aspect of money is powerful; how one views and manages finances can change drastically with experience.
• 🏠 Real estate and index funds are considered solid long-term investment strategies.
• 🔄 Money is a tool that, when managed well, can provide freedom and reduce stress.
• 🌍 Climate change poses a significant risk to investments, and adaptability is key in preparing for its financial impact.
• 🤔 Over-optimization in finances can lead to money addiction; it's important to balance knowledge with action.
• 💼 Running a business allows for direct control over investments and can lead to significant financial growth.
• 🔮 Future uncertainty calls for resilience and adaptability in both personal and business finances.

Q & A

What was Grant's initial perspective on money and how did it change over time?

Initially, Grant viewed money as a source of stress and something to run away from, as it was a constant topic of discussion and struggle in his family. However, after becoming broke and having no other options, he started to explore the concept of money deeply and realized it could be a tool for freedom and happiness. This shift in perspective led him to build a successful career in digital marketing and eventually achieve financial independence.

How did Grant's parents' financial struggles influence his money mindset?

Grant's parents' financial struggles instilled a sense of scarcity and stress around money in him. He grew up with the belief that there was never enough money and that life wasn't fair. However, he was able to overcome this mindset by educating himself about money management and personal finance, leading to a more abundant and empowered relationship with money.

What book had a significant impact on Grant's life and financial philosophy?

The book 'Your Money or Your Life' by Vicki Robins and Joe Dominguez had a profound impact on Grant. It introduced him to the concept of trading life energy for money and the importance of valuing time over money, which became his life philosophy.

How did Grant manage to save $1.25 million in 5 years, 3 months, and 6 days?

Grant achieved this by working in digital marketing during its infancy, saving 80% of his $52,000 salary, starting a side hustle, and eventually launching two different companies. His disciplined approach to saving and reinvesting his income allowed him to accumulate significant wealth in a relatively short period.

What is the 'Perennial Kid' fire movement story that Grant mentioned?

The 'Perennial Kid' fire movement story refers to Grant's journey of saving over 80% of his income, living extremely frugally, and eventually saving $1.25 million in about five years. This story is an example of the 'financial independence, retire early' (FIRE) movement, where individuals prioritize saving and investing to achieve financial independence at a young age.

How does Grant currently manage his money in terms of short-term and long-term investments?

Grant keeps two years of living expenses in a high-yield savings account, which he uses to cover his monthly expenses. For his long-term investments, he primarily invests in index funds, owning a significant portion of his net worth in them. He also has a small percentage of his investments in real estate and his business. Currently, he is focusing on reinvesting back into his business rather than adding more to his index fund holdings.

What are Grant's thoughts on the impact of climate change on investments?

Grant believes that climate change is the biggest risk to every individual's investment portfolio. He suggests that the impact of climate change will be significant and could affect the entire supply chain and infrastructure, potentially leading to shifts in what are considered sound investments. He emphasizes the importance of building adaptability and resilience into one's life and investments in light of these changes.

How does Grant view the role of money in his life now compared to when he was younger?

Now, Grant views money as a reflection of who he is and as a powerful tool that, when used wisely, can bring joy and freedom. He manages his finances with a focus on intuition and ensuring that his spending aligns with his values. Unlike when he was younger, he doesn't overoptimize his financial decisions and instead seeks to minimize friction, allowing money to flow where it's needed without causing stress or friction in his life.

What advice does Grant have for people who are new to managing their finances?

Grant advises people to first understand their net worth and have a baseline level of financial knowledge. He suggests reading a few key books or watching educational videos to gain this knowledge. He also emphasizes the importance of seeking out specific advice from experts when needed and focusing on the big picture rather than getting lost in the details.

How does Grant approach the concept of financial independence?

Grant's approach to financial independence involves building a business to sell, structuring it in a way that the sale will be taxed at capital gains treatment, and reinvesting profits back into the business. He also focuses on keeping his taxable income low and building a company that can provide him with enough income to live comfortably without needing to withdraw money from the business.

What are some key takeaways from Grant's conversation about money and personal finance?

Key takeaways include understanding the importance of money as a tool for freedom, the value of educating oneself about personal finance, the significance of building adaptability and resilience in investments considering climate change, and the evolution of one's relationship with money as they grow and change. Grant also emphasizes the importance of aligning financial decisions with personal values and intuition.