“Financial Freedom: A Proven Path to All the Money You Will Ever Need” by Grant Sabatier is the latest personal finance title to hit bookshelves. The foreword is written by Vicki Robin, author of the famous book “Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence“.
This article provides a summary of the main points discussed in the book, as well as our review of the overall information. As with all of our book reviews, our goal is to provide a high-level overview to help you determine whether this book is right for you based on your interests and level of knowledge. (Click here to read our other book reviews.)
Financial Freedom by Grant Sabatier: Review and Summary
Chapters 1 & 2: Background story and basic concepts
As is the case with many personal finance books, Financial Freedom starts out with the author’s rags-to-riches story. Grant Sabatier talks about losing several jobs, living with his parents, and having very little money in his checking account. This provides some good background information and can be motivating for some readers but if you’ve read more than a few personal finance books, then you’ve likely read very similar chapters before.
Chapter 2 deals with basic financial concepts like compound interest and inflation. The author underlines the importance of investing as much as possible, starting as early as possible. Unless you are new to investing, you can skip the first two chapters without missing any critical information.
Chapters 3 and 4: Determine your goal & calculate your net worth
This section walks you through the steps to calculate the amount of money you need to become financially independent. The author explains how the 4% rule works. In addition to saving a portfolio that will cover all of your expenses in
- Level 1: Clarity: figure out where you are and where you want to go
- Level 2: Self-sufficiency: save enough to cover one month’s worth of expenses.
- Level 3: Breathing Room: 3 to 5 months‘ worth of expenses.
- Level 4: Stability: 6 months of expenses + you need to be debt free.
- Level 5: Flexibility 2 years‘ worth of expenses.
- Level 6: Financial Independence: when your investments cover all of your expenses forever.
- Level 7: Abundant Wealth: when have more money than you could ever need.
Sabatier then shows you how to calculate your net worth by adding up all your assets and subtracting your liabilities. He stresses that your net worth is the most important number in your financial life.
In his section about debt, the author makes the point that you should pay off your debts starting with the account with the highest interest rather than starting with the lowest balance. Mathematically, he is absolutely correct. Unfortunately, studies have shown that many people don’t stick to this method. (See How to Pay Off Debt in 9 Simple Steps for a full discussion about the best ways to become debt-free.)
He also makes the point that unless you have high-interest debt (such as credit card debt), you should invest for retirement while simultaneously paying off debt. We agree with his suggestion. The one possible exception would be people who have overwhelming amounts of debt, in which case it would make sense to pay some of it off before investing for retirement.
Chapters 5 through 9: maximize your earnings and save money
In “Next-Level Money” (chapter 5), Sabatier provides an overview of later chapters. He talks about the importance of side hustles, “hacking” your job, and adopting an “enterprise mindset”. We agree that given the uncertain times we live in, people should work to create multiple streams of income through side hustles or businesses.
Chapter 6 walks you through the process of calculating your “real” hourly wage. The resulting amount can be shocking if you’ve never calculated how much you really make by subtracting the costs of your job from your income. (If you’ve read Your Money or Your Life, then you have likely already performed this step.) Once you’ve calculated your real hourly wage, you can then calculate the true price you pay for items, in terms of hours of work you exchange for everything you buy.
The part about travel hacking offers some good suggestions, such as using an incognito browser when shopping for plane tickets to avoid seeing higher prices shortly after you search for flights. Some of the suggestions to save money on food include joining restaurant meal clubs or buying discounted gift cards.
“Hacking” your 9 to 5 includes:
- Taking full advantage of all the benefits offered by your employer.
- Negotiating the option of working remotely.
- Figuring out your market value to determine an appropriate income for you based on your skills.
Chapter 9 has a section that discusses the advantages of income earned through side hustles. The author provides a few examples of side hustles he’s worked on, such as building websites or providing SEO services to clients. Unfortunately, he only provides a handful of side hustle examples so this chapter serves more like a blueprint. He suggests making a list of your hobbies, passions, and skills to see how you could earn some extra income. Also, his side hustle evaluation framework contains a good method to help you determine whether to pursue any given side hustle.
Chapters 10 and 11: Investing in stocks and real estate
Many personal finance books fail when it comes to giving sound investing advice. For the most part, we were pleasantly surprised by the advice in this book. Sabatier cautions readers to find investments with low fees. Fees and asset allocation are the top two predictors of your portfolio’s long-term performance. The author doesn’t mention it in the book but there is a great resource called
His investing method is very simple in that it only invests in a handful of (mostly Vanguard) index funds. A simple investing strategy can certainly result in good long-term results and this is a great option for someone who wants to keep their investing simple. He recommends investing 100% of your retirement savings in stocks if you are 10 or more years away from retirement.
One thing that surprised us is that even though Sabatier invests 100% of his money in stocks, he only allocates 5% to international stocks, which is very low by most standards. He also doesn’t recommend Real Estate Investment Trusts (REITs), international bonds, or gold. This is too bad because you can leverage those asset classes to increase your gains (and reduce volatility in the process) by selling the highest performing asset and buying the lowest performing asset each year. This is done by many of the best financial advisors out there.
He recommends to re-balance your accounts 4 times per year (which is a good idea) but he also says that you can spread your asset allocation throughout multiple accounts. For example, you can have one account with 100% stocks and another account with 80% stocks and 20% bonds. The problem with having an account 100% invested in stocks is that you cannot re-balance it. That is why you should ideally keep the same asset allocation across all your retirement accounts. (Accounts for short-term goals will of course have a different stocks-to-bonds allocation.)
The author is clearly a big fan of real estate investing (as are we), even though he doesn’t like investing in it through REITs. He gives some good suggestions for people wanting to invest in rental properties, such as:
- Shop around for the best mortgage rate.
- Look for properties that you could rent for at least 1% of the total value of the property.
- Look for properties when few people are buying (typically between October and December).
- How to find a good Realtor and home inspector.
How practical is the information in the book?
How sound is the advice in the book?
Does the book live up to its claims?
Like many books out there, “Financial Freedom” probably could have been a little shorter without missing any critical information. Also, Grant Sabatier tries to bring readers to his website all throughout the book, which gets a little repetitive and will likely annoy some readers. Other than these minor complaints, we think this is one of the better personal finance books out there.
Disclosure: This article is provided for informational purposes only and is not intended to form a primary basis for any investment decision that you may make. Investing involves risk, including the possible loss of principal. Past performance does not guarantee future results. Always consult with an investment advisor, tax advisor, and/or lawyer prior to making any financial planning, investment, tax, or estate decisions.
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