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

Über die Autorin bzw. den Autor

Grant Sabatier is the creator of MillennialMoney.com, which has reached over 10 million readers. He writes about personal finance, investing, entrepreneurship, and mindfulness and hosts the Financial Freedom podcast. Sabatier graduated from the University of Chicago and has been featured in the New York Times, Washington Post, NPR, Money magazine, and many others. When not traveling in his VW Camper, he lives in New York City.

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Chapter 1
Money Is Freedom
How I Went from $2.26 to $1 Million in Five Years

Grant, wake up!" my mom yelled to me from the bottom of the stairs. It was eleven a.m., and I'd slept in-again. Waking up in my childhood bedroom, I felt like I was back in middle school, but I was actually twenty-four years old, unemployed, and living with my parents-a situation all too familiar to millennials like me.

It was August 2010. I'd moved back home two months earlier after being laid off from my job as a researcher at a newspaper. My parents had told me I could crash at home but that I needed to be out in three months and they weren't going to give me a dime. Every night at dinner, they asked how my job search was going, looking at me skeptically as I tried to avoid eye contact.

The truth is, I'd recently stopped applying to jobs. I'd sent out over two hundred resumes in the past month alone and hadn't gotten a single call back. You can send only so many resumes into the abyss before it starts crushing your soul.

As I rolled over in bed that August morning, I tried to think about anything other than my current financial situation. In any case, I had an even more primal desire: I was craving a Chipotle burrito. I knew I was getting low on funds, so reluctantly I checked my account balance on my phone. The savings account I'd labeled do not touch right after I'd lost my job had $0.01 in it. My checking account balance was scarcely better: $2.26, barely enough to afford a side of guacamole, let alone a whole burrito. I took a screenshot of my account to remember this feeling and serve as motivation for the future. Eventually I hung the picture in my closet as a daily reminder, and I still see it every morning.

Defeated but still hungry, I made myself a turkey sandwich and headed outside to the backyard. It was an unseasonably cool summer day in the D.C. suburbs, the sounds of lawn mowers and neighborhood kids enjoying the last week of summer vacation filling the air.

I threw myself down on the grass, just as I'd done so many times as a kid. As I looked up into the clear blue sky, pierced only by the occasional plane headed to Washington National Airport, I contemplated how I'd arrived at this point. I'd always done what I was "supposed" to do. I'd gone to a top university, worked hard, gotten good grades, and even managed to get a job offer before I graduated. After graduation, I started working for an analytics company and assumed I was now on the path to building wealth and becoming a successful adult. But as it turned out, I was making a huge trade-off.

My first job was located in a sterile office park two hours away from where I lived. The windows in my building didn't open, and the office manager couldn't be bothered to replace the air filters, so the air was always stale. I sat in a four-foot-wide half cubicle under fluorescent lights so bright they were almost blinding. I was so worried about doing a good job and making sure my boss liked me that, by the time I got home, I was too wiped out to do anything fun. I'd zone out in front of the TV and overeat out of boredom. I gained twenty pounds, and even though I was tired all the time, I had trouble sleeping because I was too anxious about the next day. At 4:50 a.m., the alarm would go off, and I'd crawl out of bed to repeat the routine once again. As the day wore on, I'd watch the minutes of my life tick by on my computer clock.

"You'll get used to it," my dad told me by way of encouragement when I called to complain. "Welcome to the real world."

I tried to convince myself that this would all be worth it, that every minute I spent behind that desk and every dollar I earned was one minute and one dollar closer to some distant dream future in which I could live the life I wanted to live. But in reality, I was actually just trading my time for enough money to pay my bills. I got paid twice a month and was living paycheck to paycheck. The first check went directly to rent, while the second went to paying off my credit card balance, which always seemed to keep going up. I told myself I would save money at the end of the month, but I actually ended up spending more than I was making. I worked hard all week, so I went out and spent recklessly on the weekend. Work hard, play hard, right? I assured myself I would save money next month. That I would save money when I was making more money. That I would save money when I was older.

Then, just six months after I started my job, I got fired because I wasn't making the company enough money. I later did the math and realized that in those six months, I'd traded 1,400 hours of my life for $15,500 after taxes. And not only did I have nothing left, I owed $12,000 in credit card debt.

Over the next two years I bounced between unemployment and a few other jobs, but I still never managed to save anything. I was so worried about money that I started suffering from debilitating anxiety attacks so powerful that my heart felt like it would stop beating and I literally thought I was going to die. I was letting the best hours of my life during the best years of my life burn out with each biweekly paycheck.

It sucked, but I was far from alone in my plight. According to Gallup's annual survey of the American Workforce in 2017, 70 percent of employees in the United States are disengaged at work. Meanwhile, 69 percent of Americans have less than $1,000 in savings and live one disaster away from poverty, bankruptcy, or crippling debt.

When the Great Recession hit, I lost my job again. By the time I showed up back on my parents' doorstep, after three years in the working world, I had traded 4,700 hours of my life for $87,000 after taxes. And besides that $2.26, I had absolutely nothing to show for it. I didn't even have my prized Volkswagen camper van anymore because I'd sold it six months before just to make ends meet.

As I lay there in the backyard, my thoughts of the past turned to thoughts of the future. As I considered my options, I saw the next forty years-the best years of my life-stretched out before me. I imagined myself stuck in another bleak office, in another nondescript office park, in another stifling cubicle. If I somehow managed to save enough of my salary after all my bills were paid, I might be able to retire in my sixties.

Given the trends of my generation, however, even that dismal prospect seemed unlikely. Among the 83 million millennials in the United States, the average income is $35,592 per year, less than half of what our parents made at our age when adjusted for inflation. With an average of $36,000 in student loan debt, most of us don't get out of debt for years, let alone start to save any real money.

If we look closely at these numbers, it's no wonder we aren't saving enough to retire in even three to four decades. While investment guides generally recommend you sock away 10 to 15 percent of your income (even though, as I'd later learn, that definitely isn't enough), millennials under twenty-five are saving only 3.9 percent of their income for retirement, while older millennials, those aged twenty-five to thirty-four, are saving 5.35 percent. This will make it impossible for most of us to ever retire. Literally impossible!

In case that doesn't scare you enough, who knows how decisions by our government and shifts in the economy will affect our futures? Will Social Security even be around in forty years? Will we be able to afford healthcare as costs go up and as our need for it becomes greater? Inflation isn't slowing down anytime soon, meaning our paltry savings will end up being worth even less than it is today. What are we supposed to do? Work until we fall down dead at our desks? We are on our own.

I realized that doing everything I was "supposed" to do wouldn't guarantee anything, even retirement in forty-plus years. What kind of life is...