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From $2.26 to Millennial Millionaire with Grant Sabatier

This week on Taste For Tenacity, we hear from personal finance legend Grant Sabatier. Grant walks us through his story from philosophy major to millionaire. He shares some practical tips on how to build your financial future.

Transcription

0:00  

This is Taste for Tenacity Show number 28.

0:09

What is going on everybody? My name is Ben Trela and this is Taste for Tenacity. This week on the show we hear from Grant Sabatier. Grant is the author of Financial Freedom, which is an international bestseller translated into 11 languages. And he’s also the creator of Millennial Money which has reached over 20 million readers. Not too shabby. He has been dubbed the millennial millionaire, which is fantastic name. He went from $2.26 cents to a millionaire in five years. I could use some of that magic and reached financial independence at age 30. Grant writes about personal finance, investing, entrepreneurship, mindfulness, and is the host of the Financial Freedom podcast. Grant, that is a mouthful. Welcome to the show.

0:58

Hey, glad to be here. Glad to be here.

  1:01

Alright, so let’s sort of wind the clock back. I see here that you went to University of Chicago. So was the college career path sort of always on your mind? Was it what you wanted to do? Or was it something that you more followed along with?

  1:17

I think it’s a hybrid of the two. So I mean, I grew up in a household in the suburbs of Washington, DC, and I’m an only child and my parents come from very humble backgrounds, and they actually move to the DC suburbs to give me a better life, quote, unquote, than they thought that I could get where they grew up in rural Indiana. And so I always, college was always something that was expected and talked about, you know, from one of my earliest memories. It was like, I knew that I was working hard in school in order to go to college. I think the big question was, would I be able to get money to go to college? Because, you know, my parents had very little money when I was growing up and and the question was, could I get money in order to go? And so the question of the cost was always on my mind, and what school could I go to? And it’s actually one of the reasons I played soccer in college and ended up getting some academic money. And one of the reasons I worked so hard at soccer was because I was working for a scholarship, because I wanted to try to make tuition, ideally free, you know, for my parents, and so that was always a big part of the conversation. But yeah, I always thought and believed that I would go to college. If I was to do it again, like if I was 18 right now. I probably would still have wanted to go to college, but I certainly would have had more entrepreneurial opportunities that I likely would have been taking advantage of. So all the ways to make money that we have today. You know, there weren’t as many, you know, was at 16 years ago when I went to college.

  2:58

Okay, so The expectation and sort of your thought was always all right college is the way forward. Did you know when you started in college what you wanted to study? Or was there some kind of hopping around as you work to chart that out?

  3:12

Well, I think there was what I wanted to study. And then there was what my parents wanted me to study. And so my parents wanted me to study. I went to universe Chicago, it’s one of the top economics schools in the world. They wanted me to study Econ. And I took one Econ class and dropped it after two weeks, and had absolutely no interest in it. So ended up picking my major at the end of my second year. But what they wanted me to do and what I wanted to do is different. It just took me a little bit of time to kind of convince them that this is my life. This is my path. And for the first couple of years, they got my grades, you know, in the mail. It was something I actually didn’t even know that they were getting them and I was doing well and so they could see that I was doing all right. They actually didn’t tell me that until much later. Which is pretty funny. I don’t know how that worked or how that was set up. But yeah, I ended up setting something very different than they wanted me to.

  4:16

Okay, so then the question then becomes, whatdid you study? And what drew you toward that direction?

  4:22

Yeah. So I was a philosophy major, which there were kind of two benefits at the University of Chicago. Number one, is it had I think at the time, the least number of required credits in order to graduate so I really liked that the fact that I didn’t have to take all these extra crazy classes. The other is, you know, it’s one of the top philosophy programs in the world. And the cool thing about it was once they taken a couple philosophy classes, I realized that it’s kind of the quintessential University Chicago experience. So it’s like you go and you think and you read and you know all the professors as long as you showed up and you were curious and interested and tried your best, you know, you’re going to get an A. And so that’s one of the things that I liked as well. And I was just fascinated. I was just fascinated by philosophy and just studied a lot of linguistic philosophy. And it was just really cool. The class sizes were also really small. One of the great things about the UFC, I think it’s like a 10 to one at the time. It was a 10 to one student faculty ratio. And so I’m sitting here like, a really old Gothic classroom with like, the old philosophy professor, you know. It was just like out of a movie and literally, when I showed up my freshman year, that October, this is 2003. They’re actually filming a movie on campus. And so that made the campus super beautiful and they were filming, Proof, which is a movie Jake Gyllenhaal and Gwyneth Paltrow and Anthony Hopkins. It’s a great movie. It’s about a University Chicago, math professor, but literally they were filming a movie there when I was starting my freshman year. But yeah, philosophy was legit. And I’m really happy that I studied it.

  6:09

So you made this move into philosophy. And that’s definitely a pretty, pretty stark contrast compared to Econ, which was sort of the direction you were being pushed toward naturally. How did you sort of reconcile the difference between what you wanted to do and the direction you wanted to go with sort of the direction you were being steered?

  6:28

Yeah, I think, you know, it’s like anything in life, very, very hard to keep doing something, or do something that you don’t like or you don’t enjoy. So I very early on realized just kind of the value of time and sort of the ethereal nature of existence. And so, you know, once I got to college, I was like, wow, this is a really unique opportunity and experience in my life. The number one piece of advice that I got at my great graduation party from all these people was just enjoy it. Work hard, but don’t take it too seriously. Just soak it up because you’re never going to get this time back. And so I had that mentality going in. And a lot of kids at the University of Chicago, you know, there’s this tagline kind of more fun comes to die there. Because kids are so intense. They’re so serious. They’re so intense. And the Econ kids are like, at a whole different level. And so, I mean, I spent a lot of time in the library, but they were always in the library always working on problem sets. And I think for me, I wanted a much more, I’m going to lay in the grass, read my books, you know, kind of vibe. And so, you know, it didn’t take that much convincing with my parents. I was just like, here’s what I love. Here’s what I’m passionate about. And you know, they didn’t push me too hard once I started having that experience. 

  7:57

So you were looking more for sort of a reflective and experience rather than an intense experience?

  8:03

Oh, yeah, absolutely. I mean, I’m such a kind of philosopher by nature. I mean, I spend now that I’m financially independent. I literally spend all of my time reading or writing or meditating or, you know, I was up at seven. It’s a Monday morning, right now, you know, reading like Emerson essays, you know, this morning with my coffee. So it’s like, I’m always like, literally the book that I sitting here that I’m reading is, Language: The Unknown by this French philosopher Julia Kristeva. So here I am. 34 years old, still reading about philosophy. Still curious. And actually one of the reasons I worked so hard to become financially independent, so quickly was just so I could have my own time to do what ever I wanted. And I’m started working on my second book, which is a little bit more philosophical in nature. So I’m totally like I live it you know, it’s not like I am kind of the quintessential philosophy major, I would say, and it’s my life now. Now that I’ve made enough money. I spend most of my time thinking about existence and being and why people will feel stuck and all those sorts of things.

  9:17

Yeah. So you’re starting to wind up your college career now just to take a quick jump forward. And you’re a philosophy major. So what were you looking to do with that degree after you graduated? Because there’s like a five year span, from you know, graduating to 25 when you really kind of turned on the afterburners. What was going on in that phase? What was the end of your college career like?

  9:40

Yeah, so I had no idea what I wanted to do with my life. I loosely wanted to be a writer. So between my sophomore and junior year, that summer, I wrote most of a novel. And I was looking into MFA programs. I wanted to write fiction and, you know, I want to just be a writer in any form. So I was trying in a lot of different capacities to wear that hat. But, there wasn’t a real clear path for how to make that happen. And so I didn’t really beyond that. I didn’t really have a backup plan. And so, but once I graduated, and I had no money, I pretty quickly realized, okay, you need to make some money. You need to at least get some savings. But once I started making the money, then I just started spending it all. Because I was like, “oh wow, I’m making so much money”. You know, relatively, this is great. So, you know, like any one in their young 20s. You know, I went out, had a lot of fun, lived it up pretty intensely, and then at the age of 24, found myself having to move back home with my parents because I had been laid off twice. I mean, this is just after the Great Recession. So there was a lot going on. I had four different jobs after college. I’d spent all of my money. I was in credit card debt. And I couldn’t get a job after getting laid off. And so I had to move back home with my parents. I was broke and was, they were pretty worried. And that’s really where my quote unquote financial life started. Because at 24, having to move back home with my parents, that’s when I put my philosophy hat back on, and started looking at money, and just thinking, what is money? And I asked that pretty simple question. And that set me off on an entirely different path in my life. Where then I started, you know, basically spending all of my waking time reading about money and trying to make money, because I wanted to have enough so at least I could, either, A, do what I wanted to do the rest of my life or just not have the stress of money.

  11:49

Yeah, so what were some of those jobs? You said you had four jobs in that timeframe? What were some of the things you did to get by in that frame?

  11:56

Yeah, so the first job I got after college, you know, when you call up in airline or company and it says, this call may be recorded for quality assurance. Yeah, I was actually the guy on the other end of that listening to those phone calls all day for American Airlines. It was a company that American Airlines worked with. And it’s just as terrible as it sounds. It’s 10 hours a day. Listening to people basically scream at customer service agents. And I had to go in and like mark in the file when people would get upset and then I would tag that because what they were trying to do, I think they successfully did it was build like a customer service algorithm so they can figure out the sentiment like when people get angry and you know, all these different things. So boring. I only lasted about six months in that job just because I wasn’t analyzing enough calls. You know, per hour, I think it just wasn’t a great fit. And also, it was a two hour commute each way. So I was living on the south side of Chicago. And this was in like the far northern suburbs. And so, it was the quintessential like, this job sucks. But I feel really grateful. That was my first job out of college because it made me think that every job was like that in some way. And it really started stirring in me this idea of gosh, I don’t want to do this for the rest of my life. So even then, I had that, like, I remember calling on my dad and telling him and he was like, welcome to the real world. And I was like, the real world sucks. I need to figure this out. So I got laid off there ended up getting another job in Chicago. Managing a database of like PR, professionals and reporters, for this company. That was super boring. Ended up quitting that job. Worked with my friends moving company that was terrible. And then ended up working for a while at The Chronicle of Higher Education, which is a newspaper in DC. It’s kind of like the New York Times for higher ed. Every university in the world subscribes to it. And that was actually a really cool job. I was a researcher there and doing a bunch of fun stuff. I got to start writing, which I really liked. And, you know, that actually could have been a really great fit for me, but I only lasted a year, because advertising, sales in the news business, just got have been obviously getting hit really hard. And so I got laid off from that job. And I was like, you know, gosh, I put my all into that, and I still got laid off. So I quickly realized, okay, working for someone else, even when you do a great job, even when you work hard, you know, doesn’t really mean anything. And so I learned a lot of lessons that were pretty pivotal, you know, during that time period that ended up making me much more entrepreneurial, because I was like, I want to buy my own time and be my own boss, as opposed to working for someone else. But I at 24 I still had no quote unquote monetizable skills, I would say, and so that was a reality check as well. Like, okay, he spent your whole life writing and reading and thinking and those are great skills. But, how do you make money off of that? And so, then my mind switch to, “Okay, how can I make as much money as quickly as possible?”. And I started going down that rabbit hole.

  15:16

Gotcha. So now you’re 24 years old, you just moved back in your parents house, you realize, okay, I need to find a better way forward. I need to build this stash of cash as quickly as possible. What did you then do to get that first job? Did you get a traditional job? You know, how did you start making that money?

  15:35

Yeah, so I mean, I did a lot of soul searching. Literally sleeping back in the same bed that I slept in as a seven year old kid. And it’s crazy to note but that was actually 10 years ago last month. I just celebrated. I did a thing with the Wall Street Journal and Market Watch. A whole film crew actually followed me from New York down to my parents house and they filmed a conversation with me and my parents, it’s going to come out really soon, which is awesome. Super cool about reflecting back on the 10 year journey. But, you know, a lot of it was thinking about, okay, what have I been taught about money? And is it true? And so I made a simple list of, you know, everything that I’ve been taught, everything that I’d read, and I realized actually, well starting to run the numbers that a lot of what I’ve been told was either false or just outdated. And so just the simple idea of you should say 5 to 10% of your income. That’s what most people tell you and I realized that’s why most people never able to retire because simply the math just doesn’t work even with a 30-40 plus year career. So I started uncovering some of these things where I was just like geez. A lot of what I’m reading about money is either, A, really scammy. You know, I found that pretty quickly where I was like, this just seems so impossible and then on the other side, the legitimate stuff just seemed out of date or just designed to help you maybe retire in 40 years. So I started, I realized, oh, wow, this is kind of a broken. This is a broken system. And but obviously I didn’t have any skills. So I just happened to be doing a search on my phone around this time and I saw Google mobile ad. And I never seen one before. And it is 2010. And I started then googled, like Google Mobile Ads, or Google ads on phones, something like that. And what popped up, the first thing was an article from this company, E-marketer, which was jobs running Google campaigns are projected to grow 300% by 2020. And so, wow, demand is growing for people writing cool campaigns. Obviously, Google is Google. And, you know, and I had a really high reverence for them. And then the second result was Google AdWords University is what it was called. And I watched a two minute video, Introduction to Google AdWords. And I was like, this is interesting enough. This sounds pretty cool. Here’s something where demand is growing. I can do it from a computer. I got my first laptop when I was seven years old. So, you know, I’m like the first generation of digital natives. And so I was like, cool. I’m going to figure this out. And then the second thing underneath the video was get certified by Google for free. And so if you could take this test, you could get the Google AdWords certification. And I was like, great. If I can get a certification from Google, you know, that can probably maybe help me get a job. And so I didn’t have any other better options. And so I spent the next month completely over preparing for the exam. I watched all the videos. I watched a bunch of YouTube videos. Ended up passing the exam. I put it on my LinkedIn profile. I put it on my resume. I didn’t even know what job I could apply to with that certification. And I googled because I was living in DC but I want to get back to Chicago because that’s my girlfriend was. I just googled, Run Google campaigns Chicago jobs or something really dumb like that. And what popped up was just digital marketing jobs. And I ended up getting the first job that I applied to at a 25 person digital marketing agency in downtown Chicago, which was an incredible place to work. I learned an immense amount about digital marketing incredibly quickly. I worked there about a year and then left and started my own company.

  19:26

Wow. And that’s interesting, too, because at the start of all this, you kind of realized when you were 24, like, wow, I have no quote unquote, sellable skills. And so you were able and you were willing to kind of dive in and kind of peel back those layers to figure out okay, I don’t have any marketable skills at this point. What’s the most efficient pathway forward? How did you really realize that you needed to flip that switch?

  19:52

Yeah, you make it sound so clean. Like I have that perspective. I didn’t have that much clarity around it. I just wanted to do something that was going to grow in demand. I knew that writing for a newspaper wasn’t going to be a great long term decision, even though I wanted to do it. But here’s digital marketing, obviously, digital marketing is going to grow. More people are using Google. More people are searching on their phones. Okay, here’s a growing industry. Even though I didn’t really have that much interest in it. I just I saw it as an opportunity. And that’s, you know, a lot of this is luck too. I mean, the fact that I happen to be searching on my phone, and I saw the jobs are going to grow, and really right time, right place. I mean, I still think it’s an incredible path for people to pursue. But in 2010 I mean, this is like, I mean, AdWords has been around for a little while, but I mean, it was like the Wild West.

  20:55

Ground Floor.

  20:56

Yeah, absolutely. So like, I mean, I was building websites in 2011. For like 50 grand, you know, in a weekend and I was doing them by myself, I mean, I’m sure that’s possible to some extent now, but just right time, right place, right strategy. So I don’t want anyone listening to this to think that it was like, super clear. And I was like, oh, wow, here’s a really clean path to pursue. One of the goals I did set though, very clearly was I want to save a million dollars as quickly as possible. Not make a million dollars. I want to save a million. Like it was just one of these things where it’s like, here’s my goal. And then that became like, my shining light for you know, a number of years. It was that simple. I was like, How quickly can I do this? And I thought loosely, maybe it would take me like 15 years was kind of the goal in the back of my head. I had no idea that I would end up being able to do it so fast. But once you know, once you start putting all the pieces together actually started moving pretty quickly. And then about two and a half, three years in, I realized like, well, I can probably do this in five years.

  22:07

Wow. So you decide after a year with them, digital marketing agency that it was time to kind of pull the plug and go out on your own. Were you expecting to launch your own thing at any point? Or was that was it again, sort of like right place, right time I can do this on my own.

  22:23

Well, I realized this is one of the things that I talk a little bit about in my book, and I’ve talked a lot about, I think a lot of people jump into entrepreneurship too quickly. I mean, that’s the beautiful thing now that side hustling is just you can test things that you like. You can figure out if you enjoy doing it. I think a lot of people actually aren’t cut out to be entrepreneurs, being an entrepreneur is actually incredibly difficult. It can be really stressful and requires a lot of skill sets that you can build them but you have to build them and in order to be successful. And so I feel very grateful that before I became a quote unquote, entrepreneur, I was able to learn a lot really quickly. And that’s why I always encourage people, before you launch your own thing doing something, go work for someone who’s doing that. Just for 6 to 12 months to figure out, A, if you even like it. B, you’re going to learn the ins and outs. You’re going to learn the ins and outs very quickly. And then C, it might lead to an incredible opportunity that you couldn’t even imagine. I think a lot of people will go out on their own much too quickly. And so I was afraid. I mean I wouldn’t have gone out on my own. But once I started side hustling and building websites on my own, and making money on my own terms. I realized probably six months in, okay, maybe I could have my own company. It also helped that so I’m 24 at the time. The CEO of my Company was 31. And so he had started the agency when he was in his early 20s. And he was a super cool guy. And so I saw him I was like, wow, if he has a 25 person company, why can’t I have one? And so that was inspiring too and he you know. It was just one of those magical places to work where everyone was super cool. Everyone was super open, I learned a ton. I spent a lot of time with the sales guys. I spent a lot of time with the SEO team, with the front end and back end web developers, with the graphic designers. I mean, I was there, you know, 12 hours a day, every day. Just not only work my actual work didn’t take that much time. You know, I ran AdWords campaigns for a couple clients. I spent most of my time just learning about all the other facets. So I would go out to lunch, I would sit in on different meetings. And then about six months in I started helping the sales team and sold a few clients with them. So I got that experience. And by the time I’d been there 12 months, I’d already made $250,000 on the side, on my own. And so I had enough money saved that I was like, Okay, I have enough security, I don’t need a full time job. And I also had the skills and kind of saw just what my path would look like if I stayed at that agency. And, you know, there was room for advancement, but it was gonna be too slow for me. It was like, okay, a year you can become this. And I remember my boss at the time. He’s a super cool guy. He reached out to me when my book came out and did so well. He’s like, dude, man, so cool. I remember him sitting down and just kind of, I could see in his eyes that he knew that I wasn’t gonna stay around for that long. And he, I think he was supportive of that. I think he was like, Hey, you know it’s going to take about a year and a half for you to get to senior XYZ. And he had this glint in his eye. I remember thinking like, oh this dudes like totally telling me to leave. . But yeah, man, incredible experience. I’m so grateful. That company is still around. They’ve grown a ton. They’re still doing well. And I feel very fortunate that I had that experience. 

  26:17

And it’s cool too because as you stated earlier, like your side hustle are your testing grounds. So it’s what you can use to figure out one, if an idea is viable. And two, if you actually enjoy doing whatever it is.

  26:28

Absolutely, absolutely. I mean, it’s like we’re taught growing up that we should be all or nothing in our life like we should just put all just go all in. But it’s like that’s like some of the worst advice ever because so much of opportunities in life, they just happen from putting yourself in new situations. Like I end up getting clients, because, you know, I went to a party here because, you know, I wouldn’t had coffee with someone that someone else recommended and you know, I think especially when you’re in your 20s. Just being open to everything that is, I mean, put yourself in new situations. Take risks. I mean, you really don’t have to figure out your life. And this is one of the things I wish I had known. Like, you cannot have your, you know, act together until you’re like 28. You know, I mean. So like, if you’re listening to this, and you’re like, 22-23, and you’re like worried about your life, just like to just chill out, like, take a deep breath, live. One of the things you never have the energy that you have, you know, in your 20s again, I’m very different person at 34 than 24. Who you are is going to change your dreams, you’re going to change the things you love are going to change. So just take a deep breath. I see a lot of younger people, and they’re just stressed out man and I was stressed out. And I wish I could have just told myself to chill out a little bit because life kind of teaches you how to live it in a cool way. 

  28:02

Love it. So you’re scaling this business now. What went through your head as you realized number one that it was a lot more achievable to get to a million dollars in five years. But then what happened as you closed in on that million dollar mark?

  28:18

Yeah, and I think this is an important thing to note because like, tactically, I realized on my own I stumbled onto this, that the most important thing in your financial life, it’s not how much money you’re making. It’s the percentage of your income that you’re saving. And so instead of like, you know, even though I was making $300,000, most people in this country that are making six figures are still living paycheck to paycheck. You know, I know people here in New York City who make $500,000 and they’re stressed about money because they’ve adjusted their lifestyle. You know, you’ve probably heard about lifestyle, inflation. They’ve just adjusted their lifestyle. So they’re spending so much money based on how much money they’re making. And so even though I was making $300,000, I was actually saving 82% of that money. And so I was driving an $800 Nissan Maxima, I lived in a really crappy apartment for a number of years. And I realized that it was the percentage of my income that I was saving. It was actually the most important number, because you want to get your money growing as quickly as possible. It’s like putting everything on hyperdrive. And so that’s why it’s important. Making a million dollars actually isn’t that hard. Saving a million dollars is harder. But it’s a lot easier when you’re saving 50% or more of your income. So that’s all the work that I do now. Since becoming financially independent in 2015 is sharing this message. Is sharing the tactics and strategies and you know, very granularly. Here’s how to do this and here’s why the trade offs are worth it. So for me, I one of the things I think it’s also important to note, none of this matters if you don’t take the time to enjoy the freedom that this whole process is giving you. And that’s probably the biggest mistake that I made is I actually became financially independent at 30. But I worked too hard. You know, like I literally didn’t take I mean, I maybe took a Sunday off here or there when my girlfriend would just like pull me away from whatever I was working on. But I pretty much didn’t sleep for like five years, you know, I mean, I did but it’s like I was working hundred hour weeks. And I wasn’t aware enough to when I got to certain milestones to stop and kind of take or, you know, look around at my life, and ask myself is it all worth it? Because money only matters if it helps you live a life you love. And for me, even though I was making a lot of money and saving a lot of money, I was pretty unhappy. Just Because I had no balance whatsoever. And so none of this matters if you don’t take advantage of the freedom that you’re acquiring for yourself. And I think it’s always easier in life to chase something, whether it’s a promotion or a number of podcast downloads or website traffic or a million dollars. It’s a lot harder to stop and ask yourself, a, why you’re doing in the first place? B, what do you already have, and figuring out how to be grateful for it, and then C, just figuring out what enough means in your life. And that’s probably been the hardest lesson for me to learn. Because I actually could have kept growing my agency much, much bigger and made a lot more money. I mean, I probably left 10-20 million, maybe more on the table by walking away from my agency at 30. But I was no longer growing and I was no longer happy, and a lot of the things that I thought that money would get me, they didn’t get me that. I still had to do the work of figuring out who I was. And oftentimes, if you’re just running after something, then you’re not taking the time to do that work. So I’ve learned a lot since becoming a lot more since becoming financially independent about you know, that process and I was able to reflect on it. 

  32:31

It gave you the space to kind of like you said, take a step back and reflect on what you actually screwed up on, you know, is it worth it to burn the candle at both ends just to get there a couple of years sooner? Or is it more worthwhile to do it sustainably and enjoy it more? Definitely a trade off there.

  32:49

Yeah, definitely just enjoy your life. I mean, that’s the thing. I think I had a lot of financial trauma, just having to move back home with my parents being broke. Feeling ashamed. I think that that propelled me blindly for a number of years. And it’s all relative. I mean, a lot of people have already won the game, they just don’t realize it, you know?

  33:14

Love it. So you mentioned earlier now you focus a lot more on teaching the tactics and the skills to get to those insanely high savings rates and achieve financial independence and financial sustainability. So for any of our listeners that are newer to you know, this whole world, what are some of the key things that they can start to do? What are some of those key tactics that you would suggest?

  33:37

Yeah, great question. So now that we understand that your savings rate is the most important number in your financial life, the second most important is your net worth. And so your net worth is just your assets. How much money you have in any you can sell for cash, minus your liabilities which has any debt that you have. And, monitoring your savings rate and your net worth are extremely, extremely important. So there should be kind of the scorecards for your financial life. Then when you look at the tactical level, a lot of what’s talked about in the money world is you should cut back on your coffee, your Netflix subscription, you know, wine, beer, whatever. Whatever a little purchase you want to talk about. But at the end of the day, while those things certainly add up, you’re actually going to be able to save the most amount of money where you spend the most. And so the average American spends over 70% of their income on housing, transportation, and then food. And so housing is that big expense category where most people spend way too much on rent or way too much on their mortgage. The most important thing that you can do when starting out is reduce your housing expense as much as possible. And so live like a college kid as long as you can. That doesn’t mean you have to do it forever. And so like I lived in the crappiest apartment you could ever imagine for 3 years. That allowed me to save up almost a half a million dollars, you know, as part of that process. And then I was able to buy a beautiful place in Chicago. Now I live in a beautiful apartment in New York City. It’s something you don’t have to do forever. But the next three to five years of your financial life, are the most important. And so you want to reduce your housing expenses as much as possible, and then your transportation expense. So, one of the great things now is fewer people are younger people are buying new cars, but never buy a new car. Always buy used car, always buy the cheapest, most reliable car that you can. I mean, most places in this country, you can buy an incredibly reliable, amazing car for like under $3,000. Buy that car, save the difference. I actually calculated that it costs the average American a year and a half of their life to make enough money to buy a new car. And not only that, if they would have invested that money instead, they could have retired likely up to five years faster. So the net impact of buying a new car in the United States is about six and a half years of your life. And so and whether you’re willing, if you want to make that trade off, I mean, that’s totally up to you. But just realize, and this is all the work that I do. You know I don’t tell you what to buy or what not to buy. Just realize that whenever you’re working for money, whenever you’re buying anything, you’re trading time that you’re not going to ever get back for that thing. And just being mindful of that, like, if you want to buy a new car and you want to drive a truck, and it’s like the best thing ever for you, just realize just how much time you’ve traded for it. Because money is actually infinite. You can always go out and make more money, but you can never give back your time. And so vast majority of my work is focused on how do you make more money in less time, so that you can live an awesome life that you enjoy. So keeping your housing expense, your transportation expense, tracking your savings rate, tracking your net worth, and then diversifying your income streams and making sure that you are investing as much money as you can. And so, when I say diversifying income streams, most people are just, a they deserve a raise, but they never asked for one or when they do ask for when they don’t ask for enough money. And we live in a time now where there’s literally not enough people to fill the jobs available. And so the power shift has actually shifted from where the employer used to have all the power. Now the employee actually has a lot more leverage, but most people are just afraid of their boss. So they don’t ask for a raise and you know I cover literally, you know, there’s so many steps. That’s why I wrote Financial Freedom, my book because it’s just jam packed with do this than that, than this, than that and realize the trade off that you’re making. There’s like 800 different steps outlined in the book. And obviously, I’m like a really hardcore example of this. But you can take any of these pieces and put them to place in your own life and make make more money than you thought possible and make that money work for you a lot faster than you thought possible.

38:08  

Got it. So while people are saving up that money and once they hit those insanely high savings rates, you know that 50% is often the mark that we hear use. Where should they be storing all that money? Should it just sit under their mattress or in a savings account? Or should it be, you know, invested in the market? What’s what’s the best pathway forward?

38:27  

Yeah, so there’s… Your investing strategies, you have two investing strategies. Your short term investing strategy, which is money you’re going to need in five years or less. Anything for like education expenses, saving up for a down payment on a home, buying a car, taking your trip, all of that money should be kept in a high yield, online savings account. CIT bank, Ally, Barclays, Schwab, there’s a bunch of companies that have a great online savings account. Most people. There’s actually $50 billion in interest that’s lost each year in the United States. Because most people keep their short term savings in just like a normal banking savings account, than they’re actually losing money because of inflation. So all your money five years or less online, high yield savings account. What you need for the future like retirement. That’s what you want to invest, obviously, for the long term. I’m a huge believer in index funds, Vanguard, VTSAX, VTI, you know, these index funds where you’re investing in almost the entire US stock market as opposed to one company. Very anti crypto, very anti day trading stocks. Pretty anti buying individual stocks or individual companies with a disclaimer that actually over half of my own net worth is an individual stocks just because of when I bought them. The next 10 years is going to be real tough. The next 10 years, I don’t think we’re going to see obviously the same growth that we’ve seen over the last previous 10 years. But that doesn’t mean you shouldn’t be investing as much as you can. And then the final piece is one of the things that I didn’t do well. And now reflecting back, it’s easy to see, real estate is by far the fastest path to financial independence. And so you should look up this idea of house hacking, you can link to my article on the site or just read about it. It’s incredible, like being able to rent out your additional rooms, buying a three bedroom apartment or renting out the additional rooms. I mean, house hacking is this incredible strategy where you can actually reduce your housing expense, not only down to zero but you can actually make money on your housing situation. And so being able to keep that housing expense low and invest in some properties. I know people who are in their mid 20s, who’ve retired with two or three properties, because there’s two ways to become financially independent. You can save up a whole bunch of money like I did, and then live off the interest. Or you can build income producing assets that put off consistent cash, something like a rental property. And as long as one of those is actually funneling your life expenses, then you’ve reached financial independence. So a lot easier to do with just a couple properties. That’s definitely the path that I’d recommend for most people. Not nearly as scary as it might sound.

  41:27

Now two quick tangents to take. We also heard more about house hacking back in show number seven, that was with Scott Trench from the BiggerPockets world. That was a really great show, we’ll make sure to link to your article as well. And the other thing so we dropped a lot of different terms here. So to define one of them real quick. Index investing is investing in whether it’s a mutual fund which is essentially a pool of different stocks, or an ETF and exchange traded fund which is similar but you can buy it directly on like a stock exchange. But they’re basically built to track a specific index. So S&P 500. It’s an index, it tracks the overall performance of the market. Those index funds are built to just follow the index. So whatever the S&P owns, you owns, and yeah, it’s a really great, quote unquote, passive, you know, long term investment vehicle. So that tangent aside. 

  42:26

Shout out to Scott trench.

  42:28

Yeah, he was a fun show to record. He’s pretty great. So now, let’s kind of buckle down the rest of the way on to part two of the show, which is what you’ve really learned from your experience here. We’re going to focus on sort of the other actionable takeaways for people just getting into this world or finding a new path forward. So what Grant are some of the key takeaways from your career or what you’ve worked on so far? That you have learned? 

  42:59

Yeah, I’m We feel like we’ve covered so much in those lessons throughout. Yeah, I think the big takeaway is the personal finance world or the retirement world of the finance industry. They’re so hyper focused on how much money do you need for the rest of your life. And that can be the second question, but the first question always should be, what kind of life do you want to live? And then how much money does it take to live that life as opposed to the other way around? And so I think we often focus on just the wrong things. And you have to understand that any retirement projection is fundamentally flawed because you’re being asked to figure out how much money you’re going to spend each year in the future, when who you are, is a very different person than who you’re going to be in 5-10-20-30 years. So I have no idea who I’m going to be at 65. So how do I even begin to plan for that. And any type of retirement number that you come up with is just a projection. A very mathematically incorrect projection and probably a lot of cases because there are so many more variables that you can’t control than you can. And so it’s important at the end of the day, to construct your life. So you enjoy your life, not only today, but in the future. And one of the things that I didn’t do until much later I was actually thinking about very specifically what makes me happy, and how much money it needs to maintain that life. And when I did that, after becoming financially independent, I realized that like playing guitar with my friends, playing board games with my wife, walking my dog in the park on a Saturday, writing, reading. A lot of the things that I enjoy most in life are actually pretty inexpensive or free. And so, it my life, it doesn’t take a lot of money for me to be happy. That doesn’t mean I don’t spend money in certain cases where I’m going to get a lot of value for that money. But money is just a reflection of who you are. And the more that you know about yourself and who you are and what you love, and how do you want your life to look, the easier money becomes because then money just simply becomes a tool to help you live that life. And the trade offs which can be really hard at first becomes so much easier. Like for me, I know that spending you know, more than a certain amount of money each year isn’t going to make me correspondingly more happy. I also know that I hate long flights and so whenever a flights longer than three hours, I’m always going to opt for business class, whether it’s you know, me using miles or me buying that ticket. So that’s something where there’s value there for me. And the final thing is I’ve had to learn a lot about managing money as a couple. And so I got married three years ago. And my wife and I just have very different. We’re just very different people. And so not that she’s a huge spender, and I’m not she’s still pretty frugal, but when you’re planning your own life, like I was dating her, but I was still I wasn’t married this my whole entire financial independence journey. And so much easier to do when you’re one person without kids than it is when you’re two people or even with kids. Because, for example, I live in New York City. I pay an egregious amount of money for my apartment. My apartment is actually oh man, seven times more expensive than the apartment that I was living in Chicago. And it’s a beautiful apartment. I don’t personally think it’s worth it. But I’m one of two people and I’m married, and my wife really loves it. And it makes her happy. And I think it’s worth it for now. But that’s one of those things where it’s not economically sustainable for me to, for example, stay in this apartment forever. And so that’s an important thing like realizing when to make the trade offs, and just you know, focusing a year to out as opposed to 30-40 years is also really helpful.

  47:46

Love it. So then what is the one piece of advice that you would give to your 20 year old self?

  47:55

Just chill out. Take a deep breath. Realize how much you already have. You know, all this stuff, all this life is not guaranteed. Like if you have friends you love and a family you love and a job you may be kind of love or don’t even love, just realize that you already have so much more than most people have. This is the reason I ended my book this way. It’s, you know, if you make $32,000 in the United States per year, you’re in the top 1% in the entire world, and so never been easier in history to make money. But unfortunately, we’re at a time when depression, suicide, anxiety are at all time highs and continuing to grow. And so my entire life mission now has been dedicated to helping people be less stressed about money. Because money is often the number one or number two reason for divorce and suicide, depression, anxiety. And money is not that complicated. It’s really not. The tactics are very clear. The harder work is stopping and going inside and listening to that voice inside you that stirring, like our intuitions are actually really, really powerful. And that’s one of the things I just didn’t realize until I got older. Like when you’re uncomfortable and you feel stuck in your life, like that’s a sign that something needs to change. And we live in such an all or nothing world where a lot of people think that they’ve got to quit everything in their life. But in reality, I think most people are only a couple steps away from a life they’d really love. It’s just so hard to see the steps when you feel really stuck. And so for the 20 year old, chill out, enjoy your life. Take a deep breath. You already have so much more than most people have. It’s going to work out. Focus on your relationships and your health and your friends and all that stuff before money. And then realize that the next three to five years of your financial life are the most important. So especially when you’re 20, vast majority of people, if you’re 20, and you’re relatively smart, you can be financially independent by the time you’re 30 super easily.

  50:24

Now, what has been one book or resource that has helped you along in your journey?

  50:30

So many. I think one of the most impactful books that I’ve read in the past like five years, is called the Art of Living. And it’s by Thich Nhat Hanh, who’s a Buddhist monk, he’s in his 90s now. And he’s been writing for like 70 years. Martin Luther King nominated him for the Nobel Peace Prize. Incredible, remarkable guy. And he’s kind of distilled his entire everything he’s written about his life into one book. And just so beautiful. So read the Art of Living by Thich Nhat Hanh. Because the money stuff is actually easy. One of the reasons I wrote my book, Financial Freedom I’ll give a little prop to it is, you know, this took me 2800 hours to write. So I put a lot of my life into this. Most money books are terrible. They’re one idea and they’re full of fluff, or they’re just the same, regurgitated information over and over. I think it’s a great compliment to Scott Trench’s Set For Life. His book is amazing too. But everything that I think about money literally have learned over the past 10 years. I put into this book, and the reason I wrote it was because I didn’t want to have to, you know, when someone asks me, okay, how do I actually do this? Now I just like go read the book. I don’t have to repeat it a million times. And then there’s really not that much to say about money. You know, everything that I think that’s important is in that book. So read it. Read a few of other money books. And then focus on growing as a person. And so reading those books that are outside the money world actually end up helping helps me even more. And so I read a lot of linguistic philosophy. I read a lot of books on Buddhism, a lot of old school Christian theology. I don’t read a whole lot of business books now.

  52:25

Love it. Now, Grant, where can people learn more about you?

  52:30

Read the book. It’s better than anything that I’ve done. It’s totally worth it. Get it out from your library. That’s probably the coolest thing. Just go to your library. I don’t know a lot of people don’t know this. But I’m glad that libraries are like coming back. I’m so pumped about that. But go to your library, ask them to order it. A vast majority of librarians just don’t get asked to order books. And so when you ask to order one, they get so pumped up. And they order it for you. And it takes like two weeks and it’ll come in. And you can check it out. You can read it for free. And then you can leave it there and someone else and get it out. Don’t even buy the book. Go out and order from your library would be my recommendation. Check out my podcast. It’s called Financial Freedom. I’ve interviewed some really amazing people, Tony Robbins, James Clear. Some really amazing conversations. That’s a lot of fun. And then my website is millennialmoney.com. You can get really, really into the tactics and into the weeds on that site. But I actually suggest reading the book before you go to the site because it’s much more structured and organized. 

  53:38

Got it. Well, Grant Sabatier is the author of Financial Freedom, the creator of Millennial Money. He also hosted The Financial Freedom podcast. Grant, it has been an absolute pleasure chatting with you,

  53:51

Dude, nice to meet you. Thanks for all you’re doing to share this information and safe travels. 

  53:58

Appreciate it. And that does it for our show with Grant Sabatia from Millennial Money, and also the author of Financial Freedom. And the host of The Financial Freedom podcast, can’t forget that too. Now, I really enjoyed recording today’s show, because Grant really takes a philosophical approach. He wants to understand what people actually think and how we understand. And so rather than just saying, like, oh, here’s the common wisdom. He dove into the myths that wind up being plain wrong and a lot of cases, and he was willing to do that extra research to determine whether or not his beginning assumptions were correct. And that’s something that’s very important. So honest about the fact that he didn’t have any marketable skills after graduation. And so he had to take a step back and determine what his best path forward was. Now granted, a lot of that came through luck and through having some solid timing just when he grew up, but at the same time, he also was willing to put in the extra effort to get that certification in Google AdWords and to do all the extra studying necessary to make himself an asset. He’s another really great example of doing the extra work to create the life you want. Now, the big draw of financial independence is that you can do whatever you want. A lot of people think retirement is just kicking your feet up on the beach and calling it quits. But really, financial independence is all about letting you live the life you value and do the stuff that’s important to you. And that’s really what we’re talking about here is creating the type of life that you actually want to have. And building a strong financial position is one of the first and most important steps you can take in that journey. That does it for this week’s show. I really appreciate you guys taking the time to listen from Taste for Tenacity show number 28. This is Ben Trela. Thanks for listening.

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