Book Review

Subject: Financial statement analysis

Submitted To: Mam Nimra Sohail

Submitted By: Isha Tahir

Roll No. 18102001-002

Department: BBA

Semester: 6th

Section: Yellow

Date: May21st, 2021

Book Name: FINANCIAL FREEDOM A PROVEN PATH TO ALL THE
MONEY YOU WILL EVER NEED

Author Name: GRANT SABATIER

BOOK REVIEW
INTRODUCTION:

Financial Freedom, A Proven Path to All the Money You Will Ever Need is a very popular book
with those seeking financial freedom. The book is extremely relevant and very detailed. Sections
of the book, particularly around investments, are US-centric. Readers need to adapt the
framework to investment avenues available in the country they live. This book blew my mind.
More importantly, it made financial independence seem achievable.

Chapter 1 discusses 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), millennial under
twenty-five are saving only 3.9 percent of their income for retirement, Money is unlimited. Time
is not. Don’t waste time the traditional approach to retirement has three major problems: It
doesn’t work for most people. You end up spending the most valuable years of your life working
for money. It’s not designed to help you retire as quickly as possible. Compounding
exponentially increases the value of your money over time, and the earlier and more you invest,
the faster your money will come back.

After reading chapter 2, I came to the conclusion that the key to fast-tracking financial freedom
is making and investing as much money as early and frequently as you can. Inflation causes
prices to go up every year for most staples like housing, transportation, and food, but there are
ways to minimize the impact of inflation so you will need less money and can let your
investments keep growing. Don’t defer your dreams into the future. The top two regrets of those
facing the end of their lives are “I wish I’d had the courage to live a life true to myself, not the
life others expected of me,” and “I wish I hadn’t worked so hard.”

Chapter 3 tells the vast majority of personal finance advice out there is focused on helping you
maximize whatever limited money you already have. It’s focused on frugality, scarcity, cutting
back, and spending less, and doesn’t acknowledge that money is limited only if you don’t try to
make more. The relationship between money and time is not strictly linear: if you want to m
Planning for retirement is not an exact science, and how much money you need will change as
you change.

Chapter 4 discusses how much money you need ultimately depends on the type of lifestyle you
want to live. The younger you are, the less money you need to have saved before you can retire,
given that you have a much longer compounding period for your investments. The younger you
are, the less money you need to have saved before you can retire, given that you have a much
longer compounding period for your investments Chapter tell The younger you are, the less
money you need to have saved before you Ace more money, you don’t necessarily need to
sacrifice more time to do so.

The theme of chapter 5 is that consistent recurring income reduces the amount of money you will
need and can rapidly accelerate financial freedom. And retire, given that you have a much longer
compounding period for your investments. Ace more money, you don’t necessarily need to
sacrifice more time to do so. Consistent recurring income reduces the amount of money you will
need and can rapidly accelerate financial freedom. Break your number down into smaller, more
attainable daily, weekly, monthly, and annual savings goals. Net worth is the most important
number in personal finance and is your financial scorecard. Your net worth is not the same as
your number. Calculate how close you are to your number by subtracting your income-
generating investments in your net worth from your number. Pay down debt in a way that will
allow you to save (and invest) as much money as possible Building wealth relies on the same
three basic levers. Pay down debt in a way that will allow you to save (and invest) as much
money as possible Building wealth relies on the same three basic levers. Calculate how close you
are to your number by subtracting your income-generating investments in your net worth from
your number. Pay down debt in a way that will allow you to save (and invest) as much money as
possible Building wealth relies on the same three basic levers.

Chapter 6 tells most personal finance books focus too much on cutting back, Your savings rate is
directly correlated with the amount of time it will take you to hit your number. To make as much
money as possible, you want to combine and maximize as many moneymaking strategies as
possible. Investing is the ultimate passive income, and this is the main strategy the wealthy use to
both get rich and stay rich.
Chapter 7, guides us about the cost of housing accounts for about 33 percent of the average
American’s budget. Save on your housing by moving to a cheaper home or renting out your extra
rooms or entire home. Other options are living for free by house-sitting or buying a home and
house-hacking. House-hacking is when you buy a two- or three-bedroom home and rent out the
additional rooms to offset, completely cover, or even make money on your mortgage. You can
also house-hack by buying multiple units in the same building and renting them out to cover the
cost of your own.

Chapter 8 tells us how to save on transportation by walking and biking whenever possible. If you
don’t really need a car, then don’t buy one. If you do have to have one, always buy used. Get out
and explore the world. It’s never been easier to travel for less. While travel-hacking takes some
work, with a little effort you can travel for a lot less. The more you travel-hack, the better you’ll
get. Save money on food by growing your own, cooking at home, buying in bulk, bartering with
your neighbors, and hunting promos. Your full-time job is an incredible income opportunity and
you should use it as a launching pad by maximizing your benefits and salary opportunities while
building other income streams.

The theme of Chapter 9 includes Meeting with your HR team to determine what benefits you
have and how to maximize them. Almost all benefits are worth participating in. Maximize your
salary Your Company is trying to make as much money for your time as they can, so use this to
your advantage when negotiating for a raise. Research and print out information on your current
market value, value to your company, and any competing offers of employment you’ve received.
The more valuable and diverse your skill sets are and will be, the more money you will make.
Keep building your skills and your network and they will pay huge dividends over time. You
need to diversify your income streams by developing one or more side hustles—moneymaking
ventures outside of your full-time job.

In chapter 10, the author discusses that side hustling is great because you can make money—
sometimes a lot of money—doing pretty much anything. It also typically requires very little
investment to get started, and it’s easy to test multiple ideas. Side hustling to invest will fast
track your investment growth. Every side-hustle dollar you invest reduces the amount of time it
will take to hit your number. No job should be too small. Every extra $1 invested helps and
speeds up the process. Investing is the ultimate form of passive income and the accelerator of
financial freedom. It’s how you make money on your money without having to exchange any of
your time.

Chapter 11, author discusses that this strategy is built on five key concepts you can directly
influence: Minimizing risk minimizing fees minimizing taxes on your contributions maximizing.
The core of your investment portfolio should be made up of stocks (shares of actual companies),
bonds (money that you are loaning someone), and real estate (properties). These are the easiest,
most. If you do need help investing, you can hire a fee-only financial advisor for a few hours to
help you set up your accounts. You should work only with advisors who charge on an hourly or
project… Investing in real estate is more than an exceptional way to diversify your investment
portfolio and risk. In many ways real estate is a better investment than stocks because it
appreciates more quickly and therefore so will your money. When you invest in stocks, your
portfolio grows only in proportion to the money you invested and any compounded gains. With
real estate, your investment grows as the property increases in value, and since you don’t have to
put up all of the money up front, you can make your money grow much quicker. In order to buy
your first property, you need to (1) save enough for a down payment on a mortgage and then (2)
qualify for a mortgage. A mortgage is when a bank or lender lends you money to buy a home.

Chapter 12 discusses that One popular piece of advice is that your monthly mortgage payment,
plus taxes and any assessments, shouldn’t be more than 40 percent of your monthly take-home
pay. While I am an aggressive investor, 40 percent in my opinion is too high a percentage. I
think it should be 30 percent or less to be safe. Once you are ready to retire, you’ll need to
develop the right investment withdrawal strategy to ensure your money will last as long as
possible. It’s never too early to start planning your investment withdrawal strategy so you can
minimize any early withdrawal penalties (for withdrawing money before you are 59½ from your
tax-advantaged accounts) and the impact of taxes from your taxable accounts. If you do plan to
really retire early, you’ll want to have ways to fill your time and enough interests to keep you
busy. Ideally you should be retiring to something, like a passion project, a deep mission,
worldwide travel, or something you’ve always wanted to do.

After reading chapter 13, I came to the conclusion that while you’ve learned the strategies to
make early retirement possible, they are worthless unless you put them into practice. Just get
started. Remember, this book is about maximizing both your money and your time, so you need
to start implementing the strategies you’ve learned as soon as possible. Don’t waste time. This is
your starting point. You’ll look back on this in one year and be amazed at how far you’ve come.
Focus intensely and learn to say no. Just as it’s never been easier to make money, it’s also never
been easier to waste time. We surf the web mindlessly for hours or binge-watch TV shows for
entire weekends at a time. People are good at wasting time. But remember, your time is the most
valuable resource you have. Make the most of it.

Author:

Grant Sabatier (born December 13, 1984) is an American author, podcaster, blogger

and entrepreneur. He is best known for his international bestselling book Financial
Freedom which was published by Penguin Random House on February 5, 2019. He is an